<![CDATA[Ed Steer's Gold & Silver Daily]]> http://www.caseyresearch.com/feeds/main Stay abreast of the news that's moving the gold and silver markets in The Gold & Silver Daily. en <![CDATA[Gold Smuggling in India Rises 900% to Record]]> http://www.caseyresearch.com/gsd/edition/gold-smuggling-in-india-rises-900-to-record/ http://www.caseyresearch.com/gsd/edition/gold-smuggling-in-india-rises-900-to-record/#When:04:15:00Z "This does not bode well for precious metal prices going forward"

¤ Yesterday In Gold & Silver

The gold price chopped quietly lower in Far East trading on their Tuesday---and the HFT boyz and their algorithms/spoofing showed up around 2:15 p.m. Hong Kong time.  Once they were done, the price drifted quietly lower until the London morning gold fix was done at 10:30 a.m. BST.  It rallied a hair into the COMEX open, but JPMorgan et al were laying in wait once again---and within thirty-five minutes had gold down another ten bucks to its low tick of the day.  The gold price didn't do much after that.

The high and low ticks were reported by the CME Group as $1,108.20 and $1,184.80 in the June contract.

Gold closed on Tuesday in New York at $1,187.80 spot, down $18.10 from Monday's close.  Not surprisingly, gross volume was sky-high at 345,000 contracts, but it only netted out to about 142,000 contracts.  And once you take out the 21,000 net contracts from Monday, net volume yesterday wasn't overly heavy at 121,000 contracts.  On a $20 engineered price decline, that's not a lot.  I'll have more on this in The Wrap.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  Note the lack of volume on the engineered price decline in Hong Kong vs. the volume on the engineered price decline at the COMEX open.  The grey line is midnight EDT---and you need to add two hours to this chart for EDT, as it's scaled for Denver time.  The 'click to enlarge' feature is a must.

"Da boyz" laid the same lumber on silver---and the only real difference was that the metal rallied sharply off its 9 a.m. EDT low---and that was summarily dealt with.  From around 12:30 onward it traded pretty flat.

The high and low tick in that precious metal was recorded as $17.18 and $16.645 in the July contract.

Silver finished the Tuesday session at $16.72 spot, down 35.5 cents from Monday's close.  Net volume was pretty decent at 45,000 contracts.

Platinum got hammered as well---and in the same way---closing at $1,123 spot, down 25 bucks on the day.

Palladium was also affected, but mostly as an afterthought, as it closed down 8 dollars at $778 spot.

The dollar index closed late on Monday afternoon in New York at 96.37---and began to rally almost the moment that trading began in the Far East on the their Tuesday morning.  It was above by the 97.00 mark by the London open---and dipped to 96.82 at exactly 8:00 a.m. EDT.  From there it rallied up to about 97.35 just after 3 p.m. before sliding a bit into the close.  The dollar index closed on Tuesday at 97.22---which was up 85 basis points on the day.  Here's the 2-day chart so you can see the complete move over the last twenty-four hours.

Here's the 6-month dollar chart so you can see the progress of this counter-trend rally.

The gold stocks gapped down over 2 percent at the open---and never looked back.  The low tick came around 1:45 p.m. in New York---and they barely crawled off the floor after that, as the HUI closed down 3.71 percent.

The silver equities turned in a very similar performance---right down to the timing of the low tick.  Nick Laird's Intraday Silver Sentiment Index closed down 3.80 percent.

The CME Daily Delivery Report showed that only 1 gold and 66 silver contracts were posted for delivery on Thursday.  The big short/issuer in silver was the Japanese bank Mizuho.  HSBC USA stopped 23 contracts---and JPMorgan stopped 38 contracts---15 for clients, and 23 for its own account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in May dropped another 6 contracts, leaving 76 open---minus 1 whole contract mentioned in the previous paragraph.  Silver May o.i. fell by 35 contracts down to 254---minus the 66 above.

As I mentioned in yesterday's column, I was expecting all the remaining May open interest to be posted for delivery in the above Preliminary Report, but they weren't.  That leaves the rest to be delivered on Friday---First Notice Day---and one way or another May's remaining open interest in gold and silver has to be zero in tomorrow's report.  They have to be delivered into---or sold.  There are no other options.  So we wait.

There was movement in both GLD and SLV yesterday.  In GLD, an authorized participant deposited a tiny 19,181 troy ounces.  In SLV an authorized participant withdrew 1,003,544 troy ounces.

There was no sales report from the U.S. Mint yesterday---and that was a bit of a surprise.  It appears that Ted was right.  JPMorgan, the big buyer, has stepped away from the table this month, probably for the same reason they did last year---and that was because they knew they were about to hammer the silver price into the dirt, so why buy expensive when you can buy cheaper later at a price they set themselves.  What a racket!

Of course the other reason Ted gave was that they may have stopped buying silver eagles altogether, but that fact won't be knowable for months, either.  So we wait.

There was little in/out activity in gold at the COMEX-approved depositories on Monday---3,500 troy ounces in---and 101 troy ounces out.  There was little activity in silver either, as only 19,496 ounce were received---and 5,192 shipped out the door.

Over at the COMEX-approved gold kilo depositories in Hong Kong on their Monday, they received 1,866 kilobars and shipped out 3,977 kilobars.  All of the activity was at the Brink's, Inc. warehouse---and the link to that action, in troy ounces, is here.

I don't have all that many stories again today---and I'll leave the final edit up to you.

¤ Critical Reads

The world is drowning in debt, warns Goldman Sachs

The world is sinking under too much debt and an ageing global population means countries' debt piles are in danger of growing out of control, the European chief executive of Goldman Sachs Asset Management has warned.

Andrew Wilson, head of Europe, Middle East and Africa (EMEA), said growing debt piles around the world posed one of the biggest threats to the global economy.

"There is too much debt and this represents a risk to economies. Consequently, there is a clear need to generate growth to work that debt off but, as demographics change, new ways of thinking at a policy level are required to do this," he said.

"The demographics in most major economies – including the US, in Europe and Japan - are a major issue – and present us with the question of how we are going to pay down the huge debt burden. With life expectancy increasing rapidly, we no longer have the young, working populations required to sustain a debt-driven economic model in the same way as we've managed to do in the past."

This story from The Telegraph is datelined at 6:25 p.m. BST yesterday evening, which is a pretty neat trick considering that our man in Greece, Harry Grant, sent it to me at 5:37 a.m. EDT yesterday morning, so it's obviously been edited in the interim.

El-Erian: Correction in stocks could happen if…

There could be a "big air pocket" in stocks if fundamentals, at some point, don't validate valuations, Mohamed El-Erian said Tuesday.

The market has been supported by "ultra-loose" monetary policy around the world and cash from corporate balance sheets being put to work in the form of dividends, buybacks and mergers and acquisitions, Allianz' chief economic adviser said on CNBC's "Squawk Box."

While the Federal Reserve will probably hike interest rates this year for the first time in nearly a decade, El-Erian advised investors against obsessing over it.

This 4:11 minute CNBC video clip, along with a transcript, appeared on their website at 8:40 a.m. EDT yesterday morning---and I thank Dan Lazicki for his first story of the day.

JPMorgan Chase Writes Arrogant Letter to Its Swindled Forex Customers

As the U.S. Department of Labor deliberates giving JPMorgan Chase a waiver to continue business as usual after it pleaded guilty to a felony charge for engaging in a multi-bank conspiracy to rig foreign currency trading, a letter the bank sent to its foreign currency customers should become Exhibit A in the deliberations. The letter effectively tells JPMorgan’s customers, here’s how we’re going to continue to rip your face off.

Two sections of the letter stand out in particular. One section reads:

“As a market maker that manages a portfolio of positions for multiple counterparties’ competing interests, as well as JPMorgan’s own interests, JPMorgan acts as principal and may trade prior to or alongside a counterparty’s transaction to execute transactions for JPMorgan…” (Italic emphasis added.)

I posted the JPMorgan "I'm so sorry" letter in Tuesday's column, or on Saturday---and here's what the good folks over at the wallstreetonparade.com Internet site had to say about it yesterday.  I thank Richard O'Mara for sending it along.

JPMorgan’s Guilty Plea Puts Wealth Unit in Spot With Regulators

JPMorgan Chase & Co. put allegations of currency-fixing largely behind it with a guilty plea, but it’s not out of the woods yet.

With its new felony record, America’s biggest bank needs to seek the Department of Labor’s permission to keep managing money in the $8 trillion private pension market. At the same time, there’s a cloud over the JPMorgan unit where pensions are managed: The Securities and Exchange Commission is well along in an investigation into conflicts of interest in the bank’s wealth-management unit, whose products include individual retirement accounts.

That puts the bank in a sticky position -- arguing that a criminal conviction shouldn’t keep it from managing Americans’ retirement savings, while the SEC is investigating possible wrongdoing in the same division.

“When a bank has enforcement action after enforcement action, it becomes hard to argue that it won’t happen again,” says Urska Velikonja, an assistant law professor at Emory University whose research focuses on securities law.

Of course there will be no end to it, but the precious metal price management scheme is still the 1,000 pound gorilla in the living room.  This Bloomberg article showed up on their website at 3:00 a.m. Denver time on Tuesday morning---and it's the first offering of the day from West Virginia reader Elliot Simon.

After a Political Reversal in Alberta, ‘Anything Seems Possible’

This is the Canadian province known for oil, cowboys and rodeos, and as the adopted home of Prime Minister Stephen Harper, whose Conservative Party has long dominated politics.

So it seemed especially jarring when a boisterous crowd in this bastion of conservative voting known as Canada’s Texas celebrated its new premier this weekend: a woman regarded by much of the country as a leftist who vows to take on big oil and champion the poor.

The 51 newly elected New Democratic Party members who sat behind the premier, Rachel Notley, their leader, in the swearing-in ceremony on Sunday did not resemble typical revolutionaries. Largely political novices, they dressed like junior bank managers. They include nurses, a phone technician and a yoga instructor.

The ceremony on the steps of the Alberta provincial legislature, cheered by members of a large and enthusiastic crowd who could have easily passed for hockey fans celebrating a rare Edmonton Oilers victory, signified an exceptional moment in politics in both Alberta and Canada.

Yep---and if I were Prime Minister Stephen Harper, I'd be shaking in my boots right now, as the Canadian people are just itching to give this guy, along with the rest of the Federal conservatives, the old 'heave ho'---and they'll have their chance this fall.  This is another article from The New York Times.  This one was posted on their website on Monday---and I thank Roy Stephens for sending it along.

Vancouver: Real estate ‘pandemonium’

Mortgage broker David Ford thinks he has found the right way to describe the Lower Mainland’s market for single-family homes.

“Detached housing is BANANAS.

“It’s real estate pandemonium,” he writes in his latest Shop Talk newsletter for clients, realtors and financial advisers.

It’s not just single-family homes that are hot. Vancouver Mayor Gregor Robertson and former wife Amy received five offers recently for their 1,666-square-foot Stephens St. half-duplex in Kits with ocean views, purchased in 2013 for $1.57 million. Listed for $1.798 million. Sold for $1.982 million.

This story showed up on The Vancouver Sun website yesterday---and it's the second offering in a row from Roy Stephens.

Germany sees progress on Greece, E.U. officials to confer on Thursday

A senior German official said on Tuesday there was no reason to believe Greece would be in default after a 300 million euro payment to the IMF falls due on June 5.

Separately, euro zone officials said deputy finance ministers would hold a teleconference on Thursday to follow up on days of negotiations between representatives of Greece and creditors the International Monetary Fund (IMF), the European Central Bank and the European Commission.

Greece must repay four loans totaling 1.6 billion euros ($1.76 billion) to the IMF next month, starting with a 300 million euro payment on June 5.

If no deal is reached within EU/IMF for new loans to be disbursed to Athens, Greece is likely to default on the IMF loan repayment. This would start a process that could lead Greece out of the euro zone.

Will they?---Won't they?  What a soap opera.  This Reuters article co-filed from Berlin and Brussels, put in an appearance on their Internet site at 11:00 a.m. EDT yesterday morning---and it's the second offering of the day from Elliot Simon.

With Money Drying Up, Greece Is All but Bankrupt

Bulldozers lie abandoned on city streets. Exhausted surgeons operate through the night. And the wealthy bail out broke police departments.

A nearly bankrupt Greece is taking desperate measures to preserve cash. Absent a last-minute deal with its creditors, the nation will run out of money early next month.

Two weeks ago, Greece nearly defaulted on a debt payment of 750 million euros, or about $825 million, to the International Monetary Fund.

For the rest of this month, Greece should be able to cover daily cash deficits of around 100 million euros, government ministers say. Starting June 5, however, these shortfalls will rise sharply, to around 400 million euros as another I.M.F. obligation comes due. They will then double in size on June 8 and 9.

This article, filed from Athens, appeared on The New York Times website on Monday sometime---and it's another contribution from Elliot Simon.  David Stockman gave it the headline "At the Street Level, Greece is Grinding to a Halt".

Russia Officially Gives Up on Mistral Deal

Moscow has finally given up on the Mistral deal. Now Russia and France will discuss only the sum that Paris should pay Russia for the failed contract.

During the negotiations on the Mistral deal Russia and France have discussed only one question — the sum of the compensation.

"We switch the conversation to business — give us our money back… We're now discussing just one thing — the exact sum of money France owes Russia," Oleg Bochkaryov, a deputy chairman of the Russian Military Industrial Complex said.

Russia and France signed a $1.3-billion deal for two Mistral-class helicopter carriers in 2011. The handover of the first ship to Russia was scheduled for November 2014, but never happened. French President Francois Hollande put the delivery on hold due to Moscow's alleged interference in the Ukrainian crisis.

This news item appeared on the sputniknews.com Internet site at 5:02 p.m. Moscow time on their Tuesday afternoon, which was 10:02 a.m. EDT in Washington.  It's courtesy of Dan Lazicki.  The Zero Hedge spin on this is headlined "Russia Tells France It Gives Up on Mistral Ship Deal"---and it's also courtesy of Dan L.

Muslim world reacts to Obama's latest speech

This 2:20 minute youtube.com video clip appeared on Egyptian television last week---and it falls into the absolute must watch category.  I could hardly believe what I was hearing---and I thank reader U.D. for passing it around yesterday.

ISIS rise provoked by outside interference into Middle East, North Africa – Putin

There was previously no terrorism in countries where Islamic State militants “now prosper” until outside forces “not sanctioned by the UNSC” interfered, Russian President Vladimir Putin said, stressing the “serious consequences” that followed.

“We know what is happening, for example, in the Middle East, in North Africa; we know the problems associated with a terrorist organization, which has appropriated the right to be called the ‘Islamic State” (IS, formerly ISIS/ISIL),” Putin said during a meeting with security officials from the BRICS block in Moscow.

“But there was no terrorism in the countries where it [IS] flourishes today before an unacceptable interference from the outside happened, not sanctioned by the Security Council of the United Nations,” he stressed.

Russia’s president describe the consequences of such interference as “serious,” with the Islamic State currently controlling territory in Syria, Iraq, Libya, Lebanon, Afghanistan and Nigeria.

This news item showed up on the Russia Today website at 9:37 p.m. Moscow time on their Tuesday evening---and I thank Roy Stephens for sending it along.

Saudi Arabia, partners turn down Chinese requests for extra oil

Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world's biggest crude importer hits new records.

While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market.

Saudi Arabia "used to provide as and if we asked for extra cargoes on top of contract during the first four months of the year, but not for May and June," said a trader with one of China's biggest oil importers on condition of anonymity as he had no permission to talk to media.

Another source with a Chinese refinery that takes Saudi oil said Saudi heavy crude was "a bit tight" in May and June.

This Reuters article, co-filed from Beijing and Singapore, was posted on their website a week ago today---and I thank Orlando, Florida reader Dennis Mong for sharing it with us.

Iraq About to Flood Oil Market in New Front of OPEC Price War

Iraq is taking OPEC's strategy to defend its share of the global oil market to a new level.

The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month, according to shipping programs, signaling an escalation of OPEC strategy to undercut U.S. shale drillers in the current market rout. The additional Iraqi oil is equal to about 800,000 barrels a day, or more than comes from OPEC member Qatar. The rest of the Organization of Petroleum Exporting Countries is expected to rubber stamp its policy to maintain output levels at a meeting on June 5.

While shipping schedules aren't a promise of future production, they are indicative of what may come.

This Bloomberg article showed up on their Internet site at 8:37 a.m. EDT yesterday morning---and I thank International Man senior editor Nick Giambruno for passing it around yesterday.

China's currency 'no longer undervalued,' IMF says, clearing entry to SDRs

The International Monetary Fund has declared that China's currency is "no longer undervalued," marking a significant shift after more than a decade of criticism of Beijing's tight management of the renminbi.

The move amounts to a major vote of confidence in Beijing and the renminbi at a critical time. It also puts the IMF at odds with its biggest shareholder, the United States, which insists that China continues to draw an unfair trade advantage from a renminbi that it considers "significantly undervalued."

The renminbi has gained 25 per cent against the US dollar since it was allowed to adjust upward within a narrow band a decade ago, and has held its value even as the dollar has strengthened against other major currencies over the past year.

Eswar Prasad, the former head of the IMF's China unit, said the shift by the fund was important as it marked the first time since the Asian financial crisis of the late 1990s that the fund had not deemed the renminbi to be undervalued. It also presaged the likely adoption later this year of the renminbi as one of the small number of major currencies in a basket used to determine the value of the IMF's de-facto currency, the Special Drawing Rights.

This is only part of the story that appeared on the Financial Times website yesterday.  There's a bit more in the GATA release, but you'll have to go to the FT site for the rest---and a subscription is required.  The part that's posted in the clear is worth reading.

Texas Senate Passes Bill to Establish Bullion Depository, Help Facilitate Transactions in Gold and Silver

A bill taking a step towards gold and silver as commonly-used legal tender in Texas passed in the state Senate today by an overwhelming 29-2 vote.

Introduced by State Rep. Giovanni Capriglione (R- Southlake) and four co-sponsors on Feb. 12, House Bill 483 would create a state bullion depository.

What the bill essentially does is create a means for transactions to occur in precious metals. It allows people  to open an account and deposit their precious metals in the state depository. They could then use the electronic system to make payments to any other business or person who also holds an account.

This opening of the market is considered by many insiders to be the most important first step towards bringing sound money to mainstream acceptance.

This news item, filed from Austin yesterday, appeared on the tenthamendmentcenter.com Internet site---and it's something I found over at Sharps Pixley in the wee hours of this morning.

MIT developing platinum replacement

Fears of a looming crunch in platinum supply, driven mainly by a four-month-long ongoing strike at the world’s top producers of the metal in South Africa, may be about to fade.

MIT graduate student Sean Hunt, postdoc Tarit Nimmandwudipong, and Yuriy Román, an assistant professor of chemical engineering, are working on a new process to replace platinum-group metals (PGMs) with more widely available elements in renewable energy technologies.

In a paper published last week in the journal Angewandte Chemie, the team explains their proposed new method for synthesizing alternative catalysts.

This is another one of those cases of "I'll believe it when I see it!"  This short article was posted on the mining.com Internet site  back on May 18---and I thank Patrick Leavens for sending it our way.

Platinum price: The cheese and biscuits analogies -- Lawrence Williams

Platinum has been in a large deficit for the last two to three years – and a substantial one at that, last year in particular with the five-month long platinum miners’ strike in South Africa taking perhaps a further 1 million ounces away from the production picture. But, over this same period, the price has not risen, but has fallen, thus seemingly being counter to the normal supply/demand process.

An interesting panel discussion at last week’s Bloomberg Precious Metals Forum in London did not see an immediate end to this price malaise, although looking further ahead did feel there would be a stage when fundamentals would start to impact price positively. Panel members were David Jollie of Mitsui Global Precious Metals, Jonathan Butler of Mitsubishi and James Steel of HSBC, ably led by Rupen Raithatha of Johnson Matthey who had previously given the audience insights on the very significant demand for platinum in the Chinese jewellery sector.

The weak price has been all to do with the levels of above-ground stocks which some had put at over 4 million ounces, which meant there has been adequate supply out there to service demand. This without impacting positively on the price which, if anything, has allied itself to the fortunes of the gold price however illogical this might be. Indeed it was felt that we may still not yet have seen the platinum price lows if gold hits a spot of further weakness as some analysts have been predicting. Although platinum is very much an industrial metal, it is also classified by the markets as a precious metal and all the precious metals complex tends to move, to an extent at least, with the upwards and downwards movements in the gold price.  This in turn seems to move due to the huge speculative element played out for the moment primarily on the COMEX futures market.

This commentary by Lawrie appeared on the mineweb.com Internet site mid-afternoon BST in London---and if you're a PGM fan, this is worth reading.

Don’t Believe Everything You Read On The Internet -- Koos Jansen

Recently a website called Want China Times published a story titled, “China Could Crash U.S. Dollar With 30,000 Tons Of Gold: Commentary”. I would like to share my opinion on this story about the Chinese gold market that has directly or indirectly reached many readers.

Alasdair Macleod has written an article in 2014 stating “the Chinese state has probably accumulated between 20,000 and 30,000 tonnes since 1983”. In my humble opinion this estimate is based on no evidence, but you can read the article and make up your own mind. Now, was the 30,000 tonnes number conceived by MacLeod or Jin? The only source I could find on the 30,000 tonnes number is MacLeod’s estimate. In a new Chinese jacket (Duowei, Jin) the story was transformed and made additional rounds. (if someone else has an additional source I would love to read it, please comment below.)

Starting from BWChinese via Duowei and Want China Times the 30,000 tonnes story was re-ignited and has spread over the internet. Shortly after Russian website pravda.ru published, “China Saves Up 30,000 Tons Of Gold To Topple US Dollar From Global Reign”. Pravda did not include any links, but they mention Duowei as the source (so again, this was MacLeod’s estimate). Sputnik published "Dragon Rising: China's Gold Will Break World's Dependence on the U.S. Dollar".

This very interesting commentary appeared on the bullionstar.com Internet site yesterday---and it's worth reading.  I thank Koos for sending it our way.

Russia acquires gold as defense against 'political risks,' central banker explains

Russia is increasing its gold holdings because gold is a reserve asset free from legal and political risks, a senior central banker said on Tuesday.

The comments by Dmitry Tulin, who manages monetary policy at the central bank, reflect Russian fears that the country's overseas assets could be frozen as part of a possible toughening of Western sanctions over the Ukraine crisis.

"As you know we are increasing our gold holdings, although this comes with market risks," Tulin told lawmakers in the lower house of parliament. "The price of it swings, but it is a 100-percent guarantee from legal and political risks."

This Reuters article from late Tuesday morning EDT was something I found in a GATA release.

Gold smuggling in India rises 900% to record

For the first time in the history of gold smuggling in India, the seizure in illicit trade has crossed the rupees 1,000 crore mark in one financial year with customs, police, and revenue agencies seizing more than 3,500 kilograms of gold in 2014-15.

In 2012-13 the same figure stood at merely Rs 100 crore with just about 350 kilograms of gold seized. In two years, since the government increased duty on gold to 10 percent to rein in a yawning current account deficit, gold smuggling has grown by 900 percent.

Since as an accepted principle seizures could be less than 10 percent of actual smuggling, the figures look even more ominous.

Sources say gold has also begun to be smuggled in unique ways and from rather unexpected corners.

This article showed up on the Times of India website at 4:31 a.m. IST on their Wednesday morning---and I found this one the gata.org Internet site yesterday.  It's worth reading.

Turn out the lights: Australia calls commodity spending boom end

Gold miners are spearheading a wave of merger and acquisition activity in Australia, riding a rebound in local gold prices to pounce on projects promising quick growth.

In the first signs of life since the country’s mining boom went bust three years ago, companies are buying assets from international rivals tightening their belts, and partnering with fellow Australian miners.

“Everyone is looking for assets that enable them to grow. We’ve seen more M&A in Australia in 2015 than in the past five years,” Ian Murray, chairman of Perth-based Gold Road Resources Ltd told Reuters, referring broadly to the level of interest in the sector.

Progressive central bank interest rate cuts aimed at knocking down the Australian dollar and falling labour and mining costs are adding fuel to the frenzy.

This Reuters article appeared on the mineweb.com Internet site yesterday morning BST---and I found it all by myself.

¤ The Funnies

This little fellow---and he is little---is a pied-billed grebe, and is about a foot long, tops.  Both sexes are similar in appearance, so I'm not sure whether this is a male or female---not that it matters, I suppose.  It showed up right in the middle of my photo shoot with the yellow-headed blackbird that appeared in yesterday's column.  It's only because I was in my car that he got as close as he did, so I made the most of the opportunity.

¤ The Wrap

It occurred to me that it has come down to JPMorgan and other big banks being found guilty of manipulation in most of the markets they deal in, except for a very few; even though their behavior was the same in all markets. It took me a while to figure out why the banks could be found guilty in most markets, but not in others. The difference is that in the markets where the banks were found guilty were all markets where the chance of pile-on civil litigation was virtually non-existent.

OK, the banks conspired and colluded in LIBOR and foreign exchange, for instance, but who was damaged was very hard to prove and this virtually eliminated waves of follow on civil litigation. Plus, there were no strong public allegations of manipulation beforehand that I am aware of – just a sudden finding that the banks did something wrong and they agreed to settle. It was almost like the authorities and banks agreed that something was done wrong to throw everyone off the real trail.

In contrast, in the markets where the banks’ manipulation is clear, like silver, gold, copper and elsewhere, neither the Justice Department nor the CFTC would dare bring charges for fear of the avalanche of civil lawsuits that would follow. Let’s face it, it would be pretty easy for many thousands of market participants and investors to prove they were damaged by the silver manipulation were the regulators to level charges against the banks along the lines of what I write about weekly. In addition to subjecting JPMorgan and the CME to endless and unlimited litigation, it would necessarily end the manipulation in an instant and send silver prices to the heavens. - Silver analyst Ted Butler: 23 May 2015

There should be no doubt in your mind as to what's going on---and who is behind it.  JPMorgan et al took a decent chunk out of all four precious metals yesterday, but the thing that didn't impress me was the lack of net volume, something I mentioned at the top of today's column.  With the 50-day moving average taken out to the down-side in gold, I was expecting much more than we got.  Silver didn't take out any of its moving averages, but I was still expecting higher net volume there as well.  This does not bode well for precious metal prices going forward.

Here are the 6-month charts for all four precious metals so you can see the slices that "da boyz" took off the prices yesterday.

As to how bad it could get---it is, as Ted Butler keeps pounding into me, the number of contracts---not the price.  And based on yesterday's volume, there are still a boatload of long contracts left in the Managed Money category that have to puked up---and that doesn't include how far the powers-that-be can get these same traders to go on the short side.

As to how long this might take, as I said yesterday, it will either be death by a thousand cuts, or a couple of massive slices.  Their usual procedure is to slice thinly over a long period time, but make no mistake, the process started yesterday.  Just look at the 6-month gold and silver charts above and take a look at the length of time between the tops and the bottoms.

Of course the critical 50-day moving averages are much closer, and we're already through gold's, but with the Commitment of Traders numbers what they are at the moment, JPMorgan et al could engineer prices much, much lower.  Just eye-balling the above charts, I'm guessing that it could be as bad as $40 in gold---and $1.25 in silver.  Maybe more.  Ted was surprised that they didn't go after the precious metals even harder than they did yesterday, but I guess 'thinner slices' are back in vogue.

So we wait.

And as I type this paragraph the London open is just under ten minutes away, the gold price is crawling higher, silver is about unchanged, platinum is up a few bucks---and palladium is up six.  Net gold volume is very light at the moment, a bit under 10,000 contracts---and silver's net volume is around 3,300 contracts.  All is quiet at the moment, but this state of affairs won't last.

The dollar index topped out in mid-morning trading Hong Kong time---and is currently down 26 basis points.

As I said in Saturday's column---and Tuesday's as well---with all futures traders [except those standing for delivery] having to be out of the June contract by the close of COMEX trading tomorrow, roll-over volumes will be huge---and they have been.  But its the net volumes I'm not happy with.

Yesterday was the cut-off for this Friday's COT Report---and because of the high volume, most of which occurred during the New York trading session, it's doubtful that all of Tuesday's data will be reported in a timely manner.

And as I send today's column out the door at 5:20 a.m. EDT, I note that gold and silver are trading very flat---and basically unchanged. Platinum and palladium are up a bit.  The dollar index is down 20 basis points.

Not surprisingly, gold's gross volume is very high, as all the large traders have to be out by the end of the COMEX trading session today. But net volume is just under 14,000 contracts, which is very light. Silver's net volume is just under 5,000 contracts.  Nothing to see here.

It's obvious that the HFT boyz and their algorithms are not around at the moment---and it's entirely possible that they may not put in an appearance again until next week, when the June contract is off the board.  However, I wouldn't bet the ranch on that.

Whichever way it turns out, we're not out of the woods yet by any stretch of the imagination.

And on that cheery note, I'm off to bed---and I'll see you here tomorrow.

Ed Steer

Wed, 27 May 2015 04:15:00 +0000
<![CDATA[60 Countries Invest in Chinese Fund to Facilitate Central Bank Gold Purchases]]> http://www.caseyresearch.com/gsd/edition/60-countries-invest-in-chinese-fund-to-facilitate-central-bank-gold-purchases/ http://www.caseyresearch.com/gsd/edition/60-countries-invest-in-chinese-fund-to-facilitate-central-bank-gold-purchases/#When:04:10:00Z "Just waiting for the hammer to fall"

¤ Yesterday In Gold & Silver

The gold price got sold down five bucks the moment that trading began at 6 p.m. EDT in New York on Sunday evening.  It chopped around that new price all through Far East and the London trading session, although London was also closed for some sort of bank holiday.  Then at 8:30 a.m. EDT a rally began which got capped minutes after 9:30 a.m. EDT.  The second smallish rally after that also met the same fate about 12:20 p.m.---and then it got sold down a bit into the 1:00 p.m. early close.  All this trading occurred on the Globex system outside the U.S., as the U.S. [and London perhaps] were closed for Memorial Day.  But there was obviously trading going on from somewhere.

With the CME closed, there were no low and high ticks available.

Gold closed on Monday at $1,207.00 spot, up $1.10 from Friday.  Net volume was a tiny 20,800 contracts.

Silver also got sold down on the Sunday evening open in New York---and it's price pattern was identical to gold's, which it almost always is.

There are no low and high ticks, either, but it traded in a two bit range for the entire Monday session---such as it was.

Silver finished the day at $17.105 spot, up a whole 3 cents.  Net volume was a microscopic 6,000 contracts.

The platinum price eked out a tiny two dollar gain and closed on Monday at $1,148 spot.

Like gold and silver, palladium's price pattern had some structure to it.  It began to rally at 2 p.m. in Zurich---and by the time the markets closed at 1 p.m. EDT, the metal had tacked on another 7 bucks, finishing the day at $786 spot.

The folks over at ino.com stated that the dollar index closed at 96.01 on Friday afternoon in New York, but that's not what the closing numbers stated yesterday.  They showed that dollar closed on Monday at 96.37---up 5 basis points from Friday's close.  I don't know what to make of that, but I thought I'd point it out.  Here's the 3-day chart so you can see it for yourself.

With everything shut tight in New York yesterday, there's nothing from either GLD or SLV, the U.S. Mint, or the COMEX-approved depositories.  There's no CME Daily Delivery Report or Preliminary Report, either.

All the large traders in the COMEX futures market that aren't standing for delivery in the June gold contract have to be out of their positions by the COMEX close tomorrow---and the rest have to be out by the COMEX close on Thursday, so it's going to be a pretty wild from a volume perspective for the rest of the month.

And as I stated in Saturday's column, whatever outstanding May contracts that haven't been posted for delivery yet, have to be in this evening's report from the CME---and it will be interesting to see who the hold-out short/issuers were in both silver and gold.  More to the point is how many of the remaining silver contracts were picked up by JPMorgan for its own account.

Here's a nifty chart that reader U.D. passed around yesterday.  It's the Euro Interbank Offered Rate.  It is, as reader U.D. so succinctly put it---"mass insanity".

I have don't have all that many stories for you today---and I hope there are a few in here that you'll find of interest.

¤ Critical Reads

Did Someone Forget to Tell the Machines the U.S. is Shut Today?

"Unrigged"... European weakness - on the heels of increasing event risk and slowing ECB purchases - provided downward impetus to global risk assets this morning... but the machines rigging running U.S. equity futures appears to have forgotten that the U.S. markets are shut and sparked the ubiquitous rampathon back to unchanged for S&P futures (on less than 10% of daily average pro-rata volume).

The same can be said of the trading in gold and silver yesterday as well.  This tiny Zero Hedge article has a must see chart embedded, so it's worth 30 seconds of your time.

Don Coxe: Bull Market in Bonds Now Ending - Risks Ahead

Don Coxe, Chairman of Coxe Advisors, called the dawn of the bull market in bonds in 1981. Now, 34 years later, he sees it ending as bonds enter their final mania phase marked by negative interest rates. Don discusses this historic period we are now in and both the risks and opportunities he sees ahead.

This excellent transcript, plus an embedded 6:27 minute video clip, appeared on the financialsense.com Internet site on Friday---and it's definitely worth your while.  I thank Casey Research's own John Grandits for passing it around on Sunday afternoon.

Dr. Dave Janda interviews your humble scribe

The good doctor and I spent 25 minutes talking about the banks in general---and JPMorgan in particular---on Sunday afternoon.  Of course we also spent some time talking about the precious metals as well.  It was posted on the davejanda.com Internet site yesterday.

Ferguson Protesters Now Protesting Over Not Getting Paid

At least some of the protesters who looted, rioted, burned buildings and overturned police cars in Ferguson, Missouri, last year were promised payment of up to $5,000 per month to join the protests.

However, when the Missourians Organizing for Reform and Empowerment (MORE), the successor group to the now-bankrupt St. Louis branch of ACORN (Association of Community Organizations for Reform Now), stiffed the protesters, they launched a sit-in protest at the headquarters of MORE and created a Twitter page to demand their money, The Washington Times reports.

Presidential candidate and former Rep. Allen B. West, [R-Fl.], noted on his website, "Instead of being thankful for getting off the unemployment line for a few weeks and having a little fun protesting, the paid rioters who tore up Ferguson, MO, are protesting again."

"First of all, can you even imagine getting paid $5,000.00 a month for running around holding a sign and burning down an occasional building? That's around $1,250.00 per week. Try making that at McDonalds or Starbucks."

MORE is funded by liberal billionaire George Soros, the Times notes, through his Open Society Foundations (OSF).

Only in America.  This amazing story appeared on the newsmax.com Internet site at 3:07 p.m. EDT on Memorial Day---and it's another contribution from reader U.D.  It's definitely worth reading.

Businesses quietly turn to the dollar in fiercely anti-American Venezuela as currency crashes

It's still possible to buy a gleaming Ford truck in Venezuela, rent a chic apartment in Caracas, and snag an American Airlines flight to Miami. Just not in the country's official currency.

As the South American nation spirals into economic chaos, an increasing number of products are not only figuratively out of the reach of average consumers, but literally cannot be purchased in Venezuelan bolivars, which fell into a tailspin on the black market last week.

Businesses and individuals are turning to dollars even as the anti-American rhetoric of the socialist administration grows more strident. It's a shift that's allowing parts of the economy to limp along despite a cash crunch and the world's highest inflation. But it could put some goods further out of reach of the working class, whose well-being has been the focal point of the country's 16-year-old socialist revolution.

This AP story was picked up by the startribune.com Internet site at 1:45 p.m. EDT yesterday---and I found it on the gata.org Internet site.

Banks brace for more foreign exchange rigging pain as civil lawsuits come forth

Banks are bracing for hundreds of millions of pounds in new claims for foreign exchange manipulation from class-action lawsuits triggered by last week’s vast market rigging fines.

Barclays, Royal Bank of Scotland and four other banks were ordered on Wednesday to pay $6bn (£3.84bn) by U.K. and U.S. authorities.

The Barclays penalty represents the biggest bank fine in British history.

The regulators, detailing how traders gathered in chat rooms using monikers such as “The Cartel” and “Coiled cobra” to rig the $5.3 trillion-a-day currency market, also forced the banks to plead guilty to criminal charges.

Lawyers say that the fines, as well as an investigation from the European Commission, could be a springboard to damaging civil litigation in the U.K. and Europe.

This article put in an appearance on the telegraph.co.uk Internet site at 7:46 p.m. London time on their Saturday evening---and I found it embedded in a GATA release.

E.U. parliament cracks down on shell firms

People trying to hide their money in shell companies will face greater scrutiny following a new law adopted Wednesday (20 May) by the European Parliament.

Initially proposed at the start of 2013, the bill - also known as the fourth anti-money laundering directive - proposed to crack down on money laundering, terrorist financing, and to improve ways of tracing illicit transfers.

A political agreement with member states was reached last December.

MEPs expanded on it, making it more difficult for fraudsters and other criminals to hide behind shell companies to avoid paying taxes or to launder income from criminal activities. Member states have two years to transpose the rules into their national laws.

This story, filed from Brussels, showed up on the euobserver.com Internet site last Wednesday---and the reader that sent it to me wishes to remain anonymous.

Spain's ruling party punished in local elections

Voters in Spain’s two biggest cities have put the leaders of new and untried citizens’ platforms in pole position to become their mayors as the results of Spain’s local and regional ballots on Sunday reveal a highly fragmented political scene ahead of a general election due at the end of the year.

Barcelona en Comú, whose city council candidates were supported by anti-austerity movement Podemos and the Left-wing Catalan Green party, won 11 councillors with 25 per cent of the vote, narrowly ahead of the CiU Catalan nationalist grouping of current city mayor Xavier Trias, which picked up 10 seats out of 41 available.

Barcelona en Comú leader Ada Colau, formerly known as an anti-eviction campaigner, has promised a drastic reduction in perks for councillors and an emergency anti-poverty plan for the city’s poor and marginalised. “It’s a David versus Goliath victory,” a tearful Mrs Colau said as the result came in.

“We said it could be done, and we’ve proven it,” said Mrs Colau. “We are an unstoppable democratic revolution.”

This story appeared on The Telegraph's website just before midnight BST on Sunday evening---and I thank Roy Stephens for sharing it with us.

Greece to miss IMF payments amid fears of 'catastrophic' eurozone rupture

Greece will be unable to find the €1.6bn (£1.1bn) sum it is due to hand the International Monetary Fund (IMF) next month, one of the country’s ministers has admitted.

Nikos Voutsis, the Greek minister of the interior, said that “this money will not be given and is not there to be given”, speaking on Mega TV. The Greek state is due to hand over the money in four installments in June, as part of its obligations for its 2011 bail-out.

Mr Voutsis’ comments came as Yanis Varoufakis, the Greek finance minister, told The Andrew Marr Show that if progress was not made, it would be the beginning of the end for the euro project.

This is another story from the telegraph.co.uk Internet site.  It showed up there at 10:50 a.m. BST on Sunday morning---and it's the second story in the row from Roy Stephens.  Our man in Greece, Harry Grant, sent us the Zero Hedge spin on all this headlined "Greece Is on the Ragged Edge: Bloodied Ideologues vs. Bloodthirsty Technocrats".  And here's another story on Greece from The Telegraph.  This one's from Monday morning BST---and it's headlined " Greece begs for leniency as investors warn 'time for complacency' on collapse is over"---and it's courtesy of Roy Stephens as well.

No to Brussels, Yes to Kiev: New president sets course for more independent Poland

Youthful energy and rhetoric for change have seen Andrzej Duda transformed from a virtual unknown to the rising star of Eastern European politics – but his presidency could set Poland against Russia and the E.U.

On Sunday, 51.6 percent of the electorate cast their votes for Duda to replace the centrist incumbent Bronislaw Komorowski, with a turnout of 55.4 percent, according to the official results. Exit polls showed that over 60 percent of rural voters supported Duda, but only about 40 percent of those live in cities.

Like the last president from the Law and Justice party and Duda’s idol, the late Lech Kaczynski, who held the office from 2005 to 2010, the new Polish leader won by appealing to voters from the traditional heartlands – Catholics, social conservatives, farmers, and those left behind by Poland’s superficially stellar economic performance in the last decade.

This story was posted on the Russia Today website at 9:52 p.m. Moscow time on their Monday evening, which was 2:52 p.m. EDT in Washington.  It's also courtesy of Roy Stephens.

Ukraine crisis: Rebel commander Alexei Mozgovoi 'killed'

One of the top rebel commanders in eastern Ukraine, Alexei Mozgovoi, has been killed in an attack on his car, Russian and Ukrainian media report.

Mr Mozgovoi led the "Prizrak" (Ghost) battalion which was based in the Alchevsk area of Luhansk.

Reports said a bomb struck his car, which was then targeted by gunfire that killed Mozgovoi and six others.

Mr Mozgovoi was a critic of the Russian-backed separatist leadership and the Minsk accord signed with Kiev.

This story put in an appearance on the bbc.com website on Saturday sometime---and I thank Jim Skinner for sending it along.

Putin signs bill on ‘undesirable foreign groups’ into law

The Russian president has signed a bill banning the activities of foreign groups that pose a threat to national security or defense capability, and to punish those who continue to cooperate with such groups.

The bill, initially drafted by two opposition MPs, was passed by both chambers of the Russian parliament last week. It tasks the Prosecutor General’s Office and the Foreign Ministry with creating a proscribed list of “undesirable foreign organizations” and to outlaw their activities in the country. The main criterion for putting a foreign or international NGO on the list is a “threat to the constitutional order and defense capability, or the security of the Russian state.”

Once the group is recognized as undesirable, all its assets in Russia must be frozen, its offices closed and distribution of any of its information materials must be banned.

No surprises here, as foreign-sponsored NGO's, mostly U.S., have been working in many countries to overthrow their current governments.  This news story was posted on the Russia Today website at 9:52 a.m. Moscow time on their Monday morning, which was 2:52 a.m. EDT in Washington.  There was also a Fox News item on this headlined "Putin signs Russian law to shut down 'undesirable' organizations"---and it's courtesy of Brad Robertson.

City in the sky: world's biggest hotel to open in Mecca

The holy city is fast becoming a Las Vegas for pilgrims.

Four helipads will cluster around one of the largest domes in the world, like side-plates awaiting the unveiling of a momentous main course, which will be jacked up 45 storeys into the sky above the deserts of Mecca. It is the crowning feature of the holy city’s crowning glory, the superlative summit of what will be the world’s largest hotel when it opens in 2017.

With 10,000 bedrooms and 70 restaurants, plus five floors for the sole use of the Saudi royal family, the £2.3bn Abraj Kudai is an entire city of five-star luxury, catering to the increasingly high expectations of well-heeled pilgrims from the Gulf.

Modelled on a “traditional desert fortress”, seemingly filtered through the eyes of a Disneyland imagineer with classical pretensions, the steroidal scheme comprises 12 towers teetering on top of a 10-storey podium, which houses a bus station, shopping mall, food courts, conference centre and a lavishly appointed ballroom.

“The city is turning into Mecca-hattan,” says Irfan Al-Alawi, director of the UK-based Islamic Heritage Research Foundation, which campaigns to try to save what little heritage is left in Saudi Arabia’s holy cities. “Everything has been swept away to make way for the incessant march of luxury hotels, which are destroying the sanctity of the place and pricing normal pilgrims out.”

This very interesting article showed up on The Guardian website on Friday afternoon BST---and it's the second contribution in a row from reader Brad Robertson.

‘Titanic’ Global Economy May “Collapse” Warn HSBC – Gold Is Lifeboat

The chief economist of the world’s third largest bank, HSBC’s Stephen King, has compared the global economy to the Titanic.

In a note to clients on Wednesday he wrote We may not know what will cause the next downswing but, at this stage, we can categorically state that, in the event we hit an iceberg, there aren’t enough lifeboats to go round.

“The world economy is like an ocean liner without lifeboats.” As we have been warning in recent months, when another recession arrives, governments do not have the ability or the reserves to prop up the economy like they did in 2008.

Global debt has soared by 40 percent since the Great Recession. We now have a staggering $200 trillion of debt globally, or almost three times the size of the global economy. It would be a “truly titanic struggle” for policymakers to right the economy, King said.

This commentary by Mark O'Byrne over at the goldcore.com Internet site on Friday was something I meant to stick in Saturday's column, but completely forgot about---so here it is now.  If you haven't already, it's worth reading.  Here's The Telegraph's spin on this, courtesy of Ambrose Evans-Pritchard.  It's headlined "HSBC fears world recession with no lifeboats left"---and I thank Roy Stephens for finding it for us.

60 countries invest in Chinese fund to facilitate central bank gold purchases

A gold-sector fund involving countries along the ancient Silk Road has been set up in northwest China's Xi'an City during an ongoing forum on investment and trade this weekend.

The fund, led by the Shanghai Gold Exchange, is expected to raise an estimated 100 billion yuan (U.S. $16.1 billion) in three phases.

China is the world's largest gold producer and a major importer and consumer of gold. Among the 65 countries along the routes of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, there are numerous Asian countries identified as important reserve bases and consumers of gold.

About 60 countries have invested in the fund, which will in turn facilitate gold purchases for the central banks of member states to increase their holdings of the precious metal, according to the SGE.

This gold-related item, filed from Xi'An in China, appeared on the xinhuanet.com Internet site at 6:18 p.m. Beijing time on their Saturday evening.  I found it in a GATA release.  Koos Jansen also has something on this---and it's headlined "Xinhua: China Sets Up Gold Fund For Central Banks".  His comments are a must read.  The Zero Hedge spin on this is entitled "China Establishes World's Largest Physical Gold Fund"---and it's courtesy of reader M.A.

Australian gold production falls in first quarter of 2015

Australian gold production fell by 7 per cent in the first quarter of this year.

Less than 70 tonnes of the precious metal was pulled from the ground in the first three months of 2015, according to mining consultancy firm Surbiton Associates.

Director Dr. Sandra Close said the low figure was in part due to a number of shutdowns, wet weather and fewer production days from January to March.

"March is usually the lowest quarter of the year anyhow, but overall both the grade and tonnage of ore treated was lower this quarter than for December and there are quite a few reasons for that happening, in fact," she said.

This gold news item was posted on the Australia Broadcasting Corporation website on Sunday "down under"---and I thank South African reader B.V. for digging it up for us.

1,000 platinum-powered Hyundais in UK this year – Amplats

Fuel cell electric vehicles will allow platinum mining to build its future in a truly sustainable way on the back of zero exhaust emissions and the use of the world’s endless supply of hydrogen as a fuel source, Anglo American Platinum (Amplats) CEO Chris Griffith has told Platinum Week 2015 in London.

Griffith said this against the background of Korean automotive manufacturer Hyundai targeting the production of 1,000 ix35 fuel cell vehicles in the U.K. by the end of this year.

Highlighting the need for continuous industry collaboration with customers and nontraditional partners to develop uses for platinum-group metals (PGMs), Griffith outlined that if fuel cell cars succeeded in dominating the electric vehicle segment in Europe, platinum demand within Europe would rise to 6.6-million ounces in 2050.

Conversely, if battery cars dominated, demand for platinum within Europe would decline to 2.5-million ounces in the same period.

This article, filed from Johannesburg, appeared on the miningweekly.com Internet site yesterday---and it's the second offering in a row from reader B.V.

Above-ground platinum stocks unlikely to reach zero

Above-ground inventories of platinum are unlikely ever to reach zero, World Platinum Investment Council CEO Paul Wilson predicted.

Sizeable above-ground stocks are often cited as the primary reason for platinum’s failure to react to the current fundamental deficit.

“[But] they certainly don’t need to reach zero for sentiment to change and there could be a change to the price level in the marketplace,” he told delegates at the Bloomberg and CME Precious Metals Forum here on Friday.

Prices are now down 50 percent at $1,150 since the all-time peaks hit in 2008 at $2,300. The metal recently struck its lowest since the post-peak crash during 2008/2009 at $1,080 per ounce.

It's hard to believe that the guy running the World Platinum Investment Council is as ignorant as his brethren in the gold and silver mining industry, but this story proves that he is.  Until the Big 8 traders, led by JPMorgan et al, who are currently short 115 days of world platinum production get out of Dodge, the price of that precious metal is going nowhere as well.  This story, which was posted on the fastmarkets.com website, found a home over at the mineweb.com Internet site yesterday.

As LME looks east, CME throws down challenge in west: Andy Home

The London Metal Exchange (LME) Asia festivities have just wrapped up in Hong Kong.

It is the third such annual event since the LME was bought by Hong Kong Exchanges and Clearing (HKEx) in 2012 and each year, it seems, the Asian gathering of the metals industry gets larger.

The grand old London lady of metals trading is all part of Charles Li's vision of positioning Hong Kong as the renminbi gateway between mainland China and international markets. The HKEx chief is confident the LME will help open up a commodities channel to complement the newly-opened Stock-Connect highway.

It's very much still an aspiration but LME Week Asia is where the foundation stones are being laid.

This opinion piece, filed from Singapore, appeared on the Reuters website last Friday---and I found it on the Sharps Pixley website just now.

¤ The Funnies

This is a male yellow-headed blackbird.  They are widespread in the western half of North America, but not nearly as common as their red-winged cousins, at least not in these parts.  The last photo shows him standing on the road, where he was looking for road-kill insects.  He was so close that I had to back the car up [which I was using as a blind] so I could get him in focus.

¤ The Wrap

Unlike the situation in gold where there was a record weekly change but nowhere near a record level of total commercial shorts; in silver not only was there a record change for the week, the resultant level of total commercial net shorts was the highest since September of 2010. The total commercial net short position in gold is still way below where it was a few months ago, yet the total commercial net short position [in silver] is higher than it has been in more than four and a half years. My point? This is clear evidence that silver is much more manipulated in price than is gold, or any other commodity.

Eight non-silver producing speculators, euphemistically classified as commercials by the CME and CFTC, hold more than 376 million oz of equivalent silver net short in COMEX futures according to the current COT report, the most in six years. That’s the equivalent of more than 47% of total world mine production according to the CPM Group (790 million oz) and  more than 42% of the 877 million oz reported by GFMS (why there are such disparities in world silver production is beyond me – I don’t trust either organization).

The one key feature which I have long identified as at the core of the silver manipulation - the concentrated short position on the COMEX - has just rocketed to a multi-year record extreme on an anemic silver rally to just over $17 an ounce, a level at which most primary silver miners can’t turn a profit. What kind of madness is this? - Silver analyst Ted Butler: 23 May 2015

It was a nothing sort of day in the precious metals yesterday.  But, having said that, one has to wonder who the traders were in gold and silver that showed up to play at 9 a.m. EDT when New York was supposedly shut.  And as I also mentioned, there appeared to be an entity riding shotgun over them, as the tiny rallies in both metals weren't allowed to get far.

And as the Zero Hedge story in the Critical Reads section headlined "Did Someone Forget to Tell the Machines the U.S. is Shut Today?" pointed out, you have to wonder what machines are really running the show in the S&P futures market as well.  Based on that, it's not much of a stretch to think that JPMorgan et al are on top of the precious metal markets 24/7--- U.S and U.K. holidays notwithstanding.

So here we sit, looking at the ugliest Commitment of Traders Report in a very long time---and just waiting for the hammer to fall.  When that will happen is unknown, but unless JPMorgan et al get overrun, fall it will.

And as I write this paragraph, the London open is about ten minutes away---and I see that the 'salami slicing' has begun in all four precious metals, starting shortly after 2 p.m. Hong Kong time.  Gold came within a dollar of taking out its 50-day moving average to the downside---and silver is now about 30 cents away from its.  JPMorgan et al took out platinum's 50-day moving average with ease.

Gross volume in gold is at 55,000 contracts, with 17,000 of that being roll-overs out of the June contract, with most of that activity now in the new front month, which is August.  Silver's net volume is also enormous at just a hair over 11,500 contracts.  Not surprisingly, this is all being hidden behind what has all the hallmarks of a short-covering rally in the U.S. dollar index, which is currently up 53 basis points.  Like the engineered price declines in the precious metals going on at the moment, it's pretty much a given that this short-covering rally in the U.S. dollar index had some help getting started---and "da boyz" are cleaning up there as well.  The dollar rally began almost the moment that trading began in the Far East on their Tuesday morning.

Of course the technical funds in the Managed Money category are now in the process of selling their newly-acquired long positions---and probably going short as well.  The commercials are taking the other side of the trade and ringing the cash register in the process.  What a scam JPMorgan et al have going for themselves.  I wonder what percentage of the profits are ending in the pockets of persons at the CME Group and the CFTC as their 'cut'.

As I mentioned in the first section of today's column, it's going to be a busy three days in the COMEX futures market in gold in particular, as all the traders, both big and small not standing for June delivery, have to be sell or roll by the close of COMEX trading on Thursday---no "ifs, ands or buts" about it.

And as I fire today's missive out the door at 5:25 a.m. EDT, I note that gold, silver and platinum have all hit new lows for this move down once again now that London has been open for a couple of hours.  Gold's 50-day moving average has now been taken out by a bit---and the silver price is lower still.  "Da Boyz" are putting the lumber to the platinum price as well.  Here's the silver chart as of 5:37 a.m. EDT.

Net gold volume is now 51,000 contracts---and silver's net volume is just north of 15,500 contracts.  The dollar index is now back above the 97.00 mark---and up 69 basis points from Monday's close.

One thing I should point out is that the net volumes shown above includes Monday's net volumes, so you have to subtract out 20,800 contracts in gold---and 6,000 net contracts in silver to get a true picture of Tuesday's trading volume so far.  Once you do that, the volume for Tuesday isn't overly heavy.  I expect that will change once trading begins on the COMEX at 8:20 a.m. EDT.

Well, the final three days before First Notice Day are turning out to be pretty wild right out of the gate.  Today, at the close of COMEX trading in New York, is also the cut-off for this Friday's COT Report---and it will be interesting to see how much of Tuesday's [and Monday's] volume data actually makes it into that report.

I must admit that the slices out of the precious metal salamis so far today are much bigger than I was expecting, so maybe the powers-that-be are in somewhat of a rush for reasons that we don't know about.  Time will tell.

With all the insanity out there as far as the eye can see, I was reminded of how bad things really are by the quote below that has graced this column before.  I found it embedded in an e-mail that I received from reader Jim Akers yesterday.

"When you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you…you may know that your society is doomed." - Ayn Rand

That pretty much sums up where we are in the world today.

Based on the current price 'action'---absolutely nothing will shock me when I check the charts later this morning.

See you tomorrow.

Ed Steer

Tue, 26 May 2015 04:10:00 +0000
<![CDATA[Austria Repatriates 110 Tonnes of Gold From the U.K.]]> http://www.caseyresearch.com/gsd/edition/austria-repatriates-110-tonnes-of-gold-from-the-u.k/ http://www.caseyresearch.com/gsd/edition/austria-repatriates-110-tonnes-of-gold-from-the-u.k/#When:06:57:00Z "They're about as subtle as a brick through a plate glass window"

¤ Yesterday In Gold & Silver

The gold price didn't do much in Far East trading on their Friday---and was up a couple of bucks by the London open.  Shortly after that, the gold price spiked about five dollars or so, but "da boyz" were there to make sure that things didn't get too far out of hand.  The price chopped sideways from there, but at precisely 8:30 a.m. EDT, the HFT boyz and their algorithms showed up---and thirty minutes later it was all over except for the crying.  Any of the smallish rally attempts after the 9:00 a.m. low were capped.

The high and low ticks were reported by the CME Group as $1,214.60 and $1,201.00 in the June contract.

Gold closed in New York yesterday afternoon at $1,205.90 spot, down 90 cents from Thursday.  Net volume was very much on the lighter side once again at 92,000 contracts.  Gold did not make a new low for this move down, but the Managed Money probably had to puke up all the longs they put on just before the London open earlier in the day.

Here's the New York Spot Gold [Bid] chart so you can see the precision of the timing of the HFT spoofing at both 8:30 and 9:00 a.m. EDT.

The silver price action was a carbon copy of the gold action, right down to the hits at precisely 8:30 and 9:00 a.m. EDT, so I shall dispense with the details.

The high and low were recorded as $17.335 and $16.94 in the July contract.

Silver finished the Friday session at $17.075 spot, down 5.5 cents from Thursday.  Net volume wasn't overly heavy at 28,000 contracts.

Platinum hit its Friday high early in the Zurich lunch hour---and by 9 a.m. in New York was down $17 from that high---and it only recovered a few dollars from there, closing at $1,146 spot, down 7 bucks on the day.

Palladium traded pretty flat until shortly after 10 a.m. in Zurich, but down it went as well---and its low was in by about 8:30 a.m. EDT.  It rallied a decent amount from there---and was into positive territory in afternoon trading in New York, but some kind soul made sure that it closed unchanged at $779 spot.

The dollar index closed late on Thursday afternoon in New York at 95.40---and began to head south almost the moment that trading began in the Far East on their Friday morning.  The 94.82 low tick came minutes after 11 a.m. in London---and by the 8:20 a.m. EDT COMEX open, it had crawled back just above the 95.00 level.  At that point someone hit the "buy the USD/sell precious metals" button---and in less than 70 minutes the index was at 96.22---and from there it chopped more or less sideways, but took a bit of a header in the last ten minutes of trading, finishing the day at 96.01---up just about 62 basis points.

Here's the 6-month U.S. dollar index chart so you can see the manufactured rally that the powers-that-be laid on us yesterday.

The gold stocks opened down a bit, but manged to poke their nose into positive territory for a brief moment between 10:30 and 11:00 a.m. EDT on a smallish rally in gold that was going on at the time.  But once that rally was capped, the stocks rolled over as well---and back into negative territory to stay.  The HUI closed down 0.87 percent.

It was more or less that same for the silver equities, except Nick Laird's Intraday Silver Sentiment Index closed down 1.05 percent.

Nick Laird said that the HUI was down 5.51 percent for the week---and his Intraday Silver Sentiment Index closed lower by 3.52 percent.

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

The CME Preliminary Report for the Friday trading session showed that gold open interest in May fell by 6 contracts and is now down to 76 contract still open.  May silver o.i. dropped by 35 contracts, leaving 254 still to go.

I'm not sure if anything is open in the U.S. on Memorial Day or not.  If they aren't, it means that all these deliveries have to be done by Thursday at the latest, as Friday is first notice day for the June delivery month---so they've got exactly one business day left to get this all done.  Tuesday's Daily Delivery Report could prove interesting.

There were no reported changes in GLD yesterday---and as of 8:00 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was a tiny sales report from the U.S. Mint on Friday.  They sold 500 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes.

Month-to-date the mint has sold 15,000 troy ounces of gold eagles---7,000 one-ounce 24K gold buffaloes---and 1,648,500 silver eagles.  Based on these sales numbers the silver/gold ratio works out to 75 to 1.

It was another quiet day for gold over at the COMEX-approved depositories on Thursday.  Only 3,000 troy ounces were received---and nothing was shipped out.  It was ultra-quiet in silver as well.  Only 3,078 troy ounces were received---and 1,006 troy ounces were reported shipped out.

It was reasonably busy at the COMEX-approved gold kilo depositories in Hong Kong on their Thursday.  They reported receiving 4,250 kilobars---and 4,200 kilobars were shipped out.  All of the activity was at Brink's, Inc.  The link to that activity [in troy ounces] is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, was even more ugly than I imagined it could possibly be.  It was, as Ted Butler said in our phone call yesterday, "depressing."

Let me set the stage in gold.  During the the reporting week, we had four 'up' days---and one 'down' day, which was last Tuesday, the cut-off for yesterday's COT Report.  During the four 'up' days, gold gained, at best, $30-odd dollars---and gave up a hair over half of that on the one 'down' day.

During that reporting week, the Commercial net short position in gold blew out by an eye-watering 54,832 COMEX contracts, which is 5.48 million troy ounces of gold, which is the biggest 1-week increase in history.  The Commercial net short position now stands at 13.23 million troy ounces---a 70 percent increase in one week---and for what reason?  To bury a $30+ rally.  These guys are brutal.

The 'Big 4' traders added 17,700 contracts to their short position---and the '5 through 8' went short an additional 13,400 short contracts.  The other Commercial traders, Ted Butler's raptors, sold 23,700 long contracts.  It was the all-for-one-and-one-for-all "Three Musketeers" trading opposite the technical funds in the Managed Money category for fun, profit and price management.

Under the hood in the Disaggregated COT Report, the Managed Money added 28,099 long positions on that rally---and sold/covered 22,799 short contracts.  Once again, as Ted said, it's one group of traders selling to another that set the price---up and down.  It's the same old, same old.

It was the same in silver.  During the reporting week, we had four up days followed by a big down day.  During the four 'up' days, the silver price rose by about $1.25---and gave up almost half of that on the one big engineered price decline last Tuesday.

On those price moves on those five trading days, the Commercial net short position exploded by a stunning 24,382 contracts, almost 122 million ounces of silver in five trading days, or the equivalent of 53 days of total world silver production.  This is, by a very wide margin, the largest 1-week change in the Commercial net short position in silver in the history of the COMEX.

The 'Big 4' short holders added 6,600 contracts to their short position, but the '5 through 8' traders actually decreased their short position by 400 contracts.  However, the small Commercial traders, Ted's raptors, took up the slack by selling 18,200 long contracts for a profit.  Ted says the JPMorgan's short-side corner in the COMEX silver market is in the 19-20,000 contract range, which puts them up there with Canada's Scotiabank as the biggest COMEX silver short on Planet Earth.

Under the hood in the Managed Money category, the technical funds there added 8,554 long contracts and covered/sold 19,680 short contracts as the rally they started, unfolded during the reporting week.

Ted said the the COT Report in silver went from bullish to wildly bearish in just one week.  We now have the worst Commercial net short position in silver going all the way back to the end of December 2014.

If the Commercial traders hadn't been there to step in front of the Managed Money traders on this rally, we would be looking at a silver price of many hundreds of dollars---and a gold price of many thousands.  But, as always, JPMorgan et al were there to buy enough short contracts and sell enough long contracts in order to kill these rallies stone-cold dead.  This is what JPMorgan calls adding "liquidity" to the markets.  I call it price rigging---and you can call it what you want.

To be fair however, the reason that this report was such a standout in both gold and silver was the confluence of two separate events.  The first was a big rally the day before the cut-off at the start of the reporting week---and and the big engineered price decline on Tuesday to end the reporting week.

It's my opinion that some of the data from the rally the day before the cut-off for this week's COT Report [Tuesday, May 12] got shoved into this reporting period---and not all of the data from Tuesday's big engineered price decline was reported in a timely manner, either.  The confluence of those two events made this week's report one for the record books---and I'll be surprised if its ever broken.

This is the Reader's Digest version of the reporting week's events---and I'll be looking forward to what Ted has to say about all this in his weekly report to paying subscribers this afternoon EDT.

Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" in all physically traded commodities on the COMEX.  Please note that the eight largest traders in silver are now short the equivalent of 6 months world silver production.  It's my estimation that JPMorgan and Canada's Scotiabank are currently short around 90 days of world silver production between them.

It was another busy week over at the Shanghai Gold Exchange for the week ending on Friday, May 15---as they reported that 45.480 tonnes were withdrawn.  A hair over 900 metric tonnes have been withdrawn from the SGE since the start of the year.  Here's Nick Laird's most excellent chart.

I have a decent number of stories for a weekend column, so I hope you can find the time in what's left of it to read the ones you like.

¤ Critical Reads

JPMorgan Officially Apologizes For Being a Criminal Market Manipulator


The purpose of this notice is to disclose certain practices of JPMorgan Chase & Co. and its affiliates (together, “JPMorgan Chase” or the “Firm”) when it acted as a dealer, on a principal basis, in the spot foreign exchange (“FX”) markets. We want to ensure that there are no ambiguities or misunderstandings regarding those practices.

To begin, conduct by certain individuals has fallen short of the Firm’s expectations. The conduct underlying the criminal antitrust charge by the Department of Justice is unacceptable. Moreover, as described in our November 2014 settlement with the U.K. Financial Conduct Authority relating to our spot FX business, in certain instances during the period 2008 to 2013, certain employees intentionally disclosed information relating to the identity of clients or the nature of clients’ activities to third parties in order to generate revenue for the Firm. This also was contrary to the Firm’s policies, unacceptable, and wrong. The Firm does not tolerate such conduct and already has committed significant resources in strengthening its controls surrounding our FX business.

But nobody went to jail.  Then there's the unmentionable crime against humanity by JPMorgan et al---the price management scheme against the precious metals in particular---and commodities in general.  This disclosure notice appeared on the JPMorgan website on Wednesday---and it's courtesy of Dan Lazicki.  I borrowed the headline from a Zero Hedge article.

Matt Taibbi: World’s Largest Banks Admit to Massive Global Financial Crimes, But Escape Jail (Again)

In an interview with Democracy Now!, Rolling Stone journalist Matt Taibbi spoke about the recent news surrounding the five major banks – Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland and UBS – who pled guilty to rigging the price of foreign currencies and interest rates. Their fines amount up to more than $5 billion.

“They were monkeying around with the prices of every currency on Earth,” Taibbi told Amy Goodman. “So, if you can imagine that anybody who has money, which basically includes anybody who’s breathing on the planet, all of those people were affected by this activity. So if you have dollars in your pocket, they were monkeying around with the prices of dollars versus euros, so you might have had more or less money fractionally, depending on all of this manipulation, every single day.”

There's a 33:15 minute video interview, but there's also a transcript.  This excellent commentary by Matt appeared on the alternet.org Internet site on Thursday---and it's the first offering of the day from Roy Stephens.

N.Y. State investigators think Feds missed the bulk of big banks' forex rigging

Wall Street banks are facing the threat of new and more damaging allegations about their rigging of foreign exchange markets, as New York's banking regulator intensifies a probe into computer-driven currency trading -- raising the prospect that the total penalties arising from the scandal will exceed the $10 billion already paid.

The New York Department of Financial Services, run by Benjamin Lawsky, has become increasingly convinced that banks have been systematically abusing forex markets through the use of automated trades driven by computer algorithms, according to people familiar with its investigation.

Findings from the probe may indicate more widespread market abuse than U.S. and U.K. authorities disclosed on Wednesday, when detailing their settlement with six global banks, the people added. They pointed out that this $5.6 billion settlement related to allegations of market manipulation by bank employees -- but Mr Lawsky's probe covers electronic trading, which accounts for the majority of forex transactions.

The above three paragraphs are all that's posted in the clear from this Financial Times story from yesterday---and I found it embedded in a GATA release.

SEC Commissioner Furious That SEC Has Made a Mockery of "Recidivist Criminal Behavior" by Banks

Yesterday, in the aftermath of the latest settlement by the world's biggest banks, who finally admitted they have criminally rigged virtually all markets since the Great Financial Crisis (and prior) despite promising repeatedly they would not do that after having been caught time and again and punished with ever "harsher" wrist slaps, we wrote that the "Public Is Confused Why World's Biggest Banks Admitting Criminal Fraud, Leads To Public Yawns."

It appears the public is not the only one who is confused, or yawning, that yet again banks get away with just another penalty (to be paid by their shareholders) and zero jail time for the perpetrators despite what is supposedly "criminal" rigging: none other than a SEC regulator working for the same enforcer who "punished" the Too Big To Prosecute banks only to immediately grant them waivers to continue business as usual, is just as confused.

Here, two weeks after SEC commissioner Cara Stein raged that the SEC would turn a blind eye to Germany's Deutsche Bank for a "Decade Of Lying, Cheating, And Stealing", is her dissenting opinion with the SEC settlement, this time broadening her anger to include all the banks, not just the German one.

This 'dissenting statement' appeared in this Zero Hedge article that appeared on their website at 7:58 a.m. EDT on Friday morning---and it's worth reading if you have the time.  It's the second offering of the day from Dan Lazicki.  There was more commentary on this in a story that was posted on the wallstreetonparade.com Internet site yesterday---and it's headlined "DoJ Calls Out UBS Rap Sheet; Ignores Homegrown Citigroup’s Rap Sheet"---and I thank Richard O'Mara for digging up that one for us.  It's worth reading as well.

Fed still seen in lift-off mode as Yellen takes center stage

The U.S. Federal Reserve is likely to stick with plans to raise interest rates later this year, with progress towards its employment and inflation goals helping allay concerns over the economy's recent weakness, current and former Fed officials say.

Fed Chair Janet Yellen, who on Friday will talk about the economy's prospects, is expected to acknowledge the recent sluggishness, including near stagnant performance in the first few months of the year.

But she will also probably repeat the mantra that better days should follow a temporary swoon, and highlight the economy's steady job growth, keeping the Fed on track for its first policy tightening in nearly a decade.

Hours ahead of her speech inflation showed a flicker of life, with the Consumer Price Index, once stripped of volatile food and energy components, recording a 0.3 percent rise in April. Though the Fed uses another measure for its 2 percent target, the CPI report on Friday showed prices increasing across a broad set of items, giving the Fed "affirmation core trends are moving their way," said TD Securities analyst Eric Green. "In effect, inflation is not an obstacle to tightening."

Well, dear reader, I'll believe this rate increase when I see it.  This Reuters article, filed from New York, showed up on their Internet site at 11:47 a.m. EDT yesterday---and I thank Orlando, Florida reader Dennis Mong for sharing it with us.

Doug Noland -- Paying for the Past: Insight from Lindsey, Fisher and Greenspan

The root cause of a complex predicament is actually rather uncomplicated: it’s called inflationism. And there’s a reason why I am not the least bit optimistic. Despite centuries of history, we’ve somehow bought into the fallacy that “money printing” can resolve structural issues (financial, economic and social). In the face of overwhelming contrary evidence, central bankers and their supporters have clung to the sophistry that they can raise prices levels – in the real economy and securities markets – and that such inflation supports system growth and stability. Central banks have over-promised and have been too content to feed fanciful notions of their omnipotence and overwhelming power. Progressively bolder “activist” central bankers were afforded way too much discretion to experiment. In the end, their inflationary policies primarily inflated asset prices and securities market speculative Bubbles. And each policy error – accommodating or, worse yet, orchestrating a new Bubble – invariably led to only bigger blunders. The greater the boom and bust the more outlandish the subsequent reflationary cycle and attendant Bubbles.

For today’s readers and for the reader in 2065, it is imperative to appreciate that the Fed (and global central bankers more generally) is today trapped. Borrowing from Larry Lindsey, “We’re at the point of absurdity.” Yet normalization from absurd rates and central bank monetization is indefinitely deferred because of fears of bursting Bubbles. The great danger of central bank controlled, market-based finance has come to fruition: central bankers see no alternative than to allow Bubbles to run wild. And unhinged markets will do what unsound markets do: go to self-reinforcing precarious excess.

The nature is unclear and the course always uncertain. The end game, however, is never in doubt. Inflationism is seductive – it sets an incredibly powerful trap. And it inevitably reaches the point of no return. If only the Fed would quickly mend its ways and begin normalizing rates. I very much wish it wasn’t too late. But these global Bubbles are not going to tolerate anything like normality.

Doug's weekly Credit Bubble Bulletin is always a must read for me---and this one is no exception.  I thank reader U.D. for passing it around early yesterday evening.

Hundreds of Tech Companies Line Up to Oppose TPP Trade Agreement

More than 250 tech companies have signed a letter demanding greater transparency from Congress and decrying the broad regulatory language in leaked parts of the controversial Trans-Pacific Partnership trade bill.

The TPP would create an environment hostile to journalists and whistleblowers, said policy directors for the Electronic Frontier Foundation and Fight for the Future, co-authors of the letter. “TPP’s trade secrets provisions could make it a crime for people to reveal corporate wrongdoing ‘through a computer system’,” says the letter. “The language is dangerously vague, and enables signatory countries to enact rules that would ban reporting on timely, critical issues affecting the public.”

Among the signatories is activist, sci-fi author and The Guardian tech columnist Cory Doctorow. “Democracies make their laws in public, not in smoke-filled rooms,” Doctorow wrote. “If TPP’s backers truly believed that they were doing the people’s work, they’d have invited the people into the room. The fact that they went to extreme, unprecedented measures to stop anyone from finding out what was going on – even going so far as to threaten Congress with jail if they spoke about it – tells you that this is something being done to Americans, not for Americans.”

This story, which originally appeared on The Guardian website, was reposted on the alternet.org Internet site on Thursday---and it's the second contribution of the day from Roy Stephens.

Hyperinflation in Venezuela, which just pawned its gold

Venezuelans are dumping their rapidly-depreciating currency at a quicker pace, leading to a staggering plunge in its free-market value, as the crisis-plagued economy edges closer to an outbreak of hyperinflation.

DolarToday, a widely followed website that tracks exchanges made near the Colombian border, reported today that the bolivar had lost a quarter of its value over the last seven days.

Everyone in smartphone-obsessed Caracas seemed to learn of the crash at the same time as the DolarToday app, a ubiquitous tool in the South American country, sent out a series of messages announcing the new rates under the headline "Hyperinflation!"

Venezuelan currency was trading at around 420 bolivars per dollar Friday afternoon, according to the site. That was down from 300 bolivars per dollar on May 14 and 173 at the start of the year.

This AP story from yesterday afternoon EDT was filed from Caracas---and was subsequently picked up by the news.yahoo.com Internet site---and is a must read.  I found it on the gata.org Internet site last night.

Bank of England accidentally emails Brexit task force plans to newspaper

The Bank of England has accidentally revealed that it has set up a task force to look at how a U.K. exit from the European Union will affect the economy.

"Project Bookend" - as the Bank has dubbed the initiative - will be led by Sir Jon Cunliffe, deputy governor and a board member at the Prudential Regulatory Authority.

However, it is how the plans have been revealed that will cause embarrassment at the central bank.

Details of the task force, as well as how Bank officials should deal with media questions regarding a "Brexit", were accidentally e-mailed to The Guardian.

The e-mail was sent from Sir Jon's secretary to four senior executives at the Bank - Iain de Weymarn, Governor Mark Carney's private secretary; Nicola Anderson, head of risk assessment in the financial stability department; Phil Evans, director of the international division; and Jenny Scott, executive director communications. However, it was also accidentally forwarded to an editor at The Guardian.

You couldn't make this stuff up!  This news item appeared on the telegraph.co.uk Internet site at 7:45 p.m. BST in London yesterday evening, which was 2:45 p.m. EDT in Washington.  I thank South African reader B.V. for sending it our way.

Apple and Google Just Attended a Confidential Spy Summit in a Remote English Mansion

At an 18th-century mansion in England’s countryside last week, current and former spy chiefs from seven countries faced off with representatives from tech giants Apple and Google to discuss government surveillance in the aftermath of Edward Snowden’s leaks.

The three-day conference, which took place behind closed doors and under strict rules about confidentiality, was aimed at debating the line between privacy and security.

Among an extraordinary list of attendees were a host of current or former heads from spy agencies such as the CIA and British electronic surveillance agency Government Communications Headquarters, or GCHQ. Other current or former top spooks from Australia, Canada, France, Germany and Sweden were also in attendance. Google, Apple, and telecommunications company Vodafone sent some of their senior policy and legal staff to the discussions. And a handful of academics and journalists were also present.

According to an event program obtained by The Intercept, questions on the agenda included: “Are we being misled by the term ‘mass surveillance’?” “Is spying on allies/friends/potential adversaries inevitable if there is a perceived national security interest?” “Who should authorize intrusive intelligence operations such as interception?” “What should be the nature of the security relationship between intelligence agencies and private sector providers, especially when they may in any case be cooperating against cyber threats in general?” And, “How much should the press disclose about intelligence activity?”

This interesting story showed up on The Intercept website yesterday morning EDT---and it's another contribution from Roy Stephens.

Welsh wing-maker Airbus E.U. exit warning

The president of aerospace giant and Welsh wing-maker Airbus says the firm would reconsider U.K. investment if Britain left the European Union.

Paul Kahn said Britain must compete for international investment.

The company employs 6,000 people at its wing factory at Broughton, Flintshire, and a further 4,000 at Filton, Bristol.

The comments follow the head of JCB stating Britain should not fear an E.U. exit. It employs about 500 people at its Wrexham plant.

But speaking to the BBC, the Airbus president said the best way to guarantee continuing investment was "by remaining part of the E.U."

This BBC article was posted on their website on Thursday, but I saved it for today because there's a youtube.com video about how this company makes wings for the new Airbus 380.  I watched it a couple of weeks ago---and if the manufacturing process fascinates you, as it does me, this video is a must watch---and it's linked here.  By the way, this wing plant in Wales is not going anywhere, with or without the U.K. being in the E.U.  The reader that send me this story wishes to remain anonymous.

Italy's 'eternally unfinished' highway enters final stretch - 50 years after construction began

Back in 1966, Lunar 9 was the first spacecraft to achieve a controlled landing on the Moon, England won the World Cup, and Italy opened the first section of the Salerno to Reggio Calabria motorway.

In the intervening half-century space missions have gone on to greater things, England have struggled to repeat their success, and, incredibly, Italy is still plodding on with the construction of the A3, “the eternally unfinished autostrada”, as it’s known.

Construction of the 443km stretch of road, which is supposed to run from Salerno, just south of Naples, down to the capital of the Calabria region, in the toe of the Italian boot, has been plagued by faulty construction, delays and scandal. Campaigners say that during this time it’s come to look like the incarnation of everything that’s wrong with the country, hamstrung by corruption and bad management. “It’s a symbol of how public works are in Italy,” said Stefano Zerbi, spokesman for the national consumer organisation, Codacons.

It’s not lost on anyone that the road stretches from Campania, the regional home of the Camorra crime syndicate, and then passes through the ‘Ndrangheta badlands, including towns such as Rosarno and Gioia Tauro.

Obviously I don't know much about it Italy, because my jaw hit the floor, as I couldn't believe what I was reading.  Truth is really stranger than fiction---and for that reason you should seriously consider reading this.  It appeared on the independent.co.uk Internet site on Wednesday---and for obvious reasons had to wait for today's column.  Once again I thank Roy Stephens for sharing it with us.

Eastern Promises: Riga Summit Ends With Division, Little Progress

The Eastern Partnership summit in Riga ended with growing divisions and no promises on issues of visa-free travel, which worried some members.

The European Union's Eastern Partnership summit with six ex-Soviet states ended with little progress as the partnership countries were divided in their aspirations for European integration and their goals for visa-free travel.

The representatives of Armenia, Azerbaijan and Belarus refused to sign the initial document which stated that the summit condemned Russia's reunification with Crimea, which the document called an "illegal annexation." Ukrainian President Petro Poroshenko, who was waiting for a "signal" from the E.U. on a visa-free regime, was told by German Chancellor Angela Merkel that the E.U. is not ready for it.

This news item was posted on the sputniknews.com Internet site at 5:08 p.m. Moscow time on their Friday afternoon, which was 10:08 a.m. EDT in Washington.  It's another contribution to today's column from Roy Stephens.  There was a Bloomberg story on this Riga Summit.  It's headlined "Greek Talks Break Up as Earlier Optimism Evaporates"---and it showed up on their Internet site at 5:05 p.m. Denver time on Thursday afternoon.  I found it in yesterday's edition of the King Report.

John Batchelor Interviews Stephen F. Cohen

Just when events are said to be winding down in the Ukraine Civil War we see that after Assistant Sec. State, Nuland’s visit to Moscow last weekend and her assurances that Kiev is on side with Minsk2, the Donetsk Airport area just a day later came under the heaviest shelling for months.

And John Batchelor and Stephen F. Cohen make an effort to find out what is really happening through the “fog of diplomacy” with this process. Last week they see three main features of interest and new very serious global concerns for the  New Great Game:

1) Dimitry Medvedev, the Russian Prime Minister disallows use for USA to supply Afghanistan from Russian Federation territory.

2) Kyiv is claiming the capture of two Russian soldiers.

3) And probably most important, a positional statement from the Carlisle Barracks, the United States Army War College, that essentially told the White House that a containment policy against Russia will not work and it is time to consider one of cooperation and competition. At present, as the parties work out strategies the United States, NATO, Russian and Europe, our esteemed pundits here try to determine whether the Western players, especially Washington, are truly backing away from supporting Kyiv or whether this is a ploy.

If you're following events in the Ukraine, this 39:50 minute audio interview is certainly worth your while.  It was posted on the johnbatchelorshow.com Internet site on Tuesday---and I thank Larry Galearis for bringing it to our attention.

What if Putin is Telling the Truth? -- F. William Engdahl

On April 26 Russia’s main national TV station, Rossiya 1, featured President Vladimir Putin in a documentary to the Russian people on the events of the recent period including the annexation of Crimea, the U.S. coup d’etat in Ukraine, and the general state of relations with the United States and the E.U. His words were frank. And in the middle of his remarks the Russian former KGB chief dropped a political bombshell that was known by Russian intelligence two decades ago.

Putin stated bluntly that in his view the West would only be content in having a Russia weak, suffering and begging from the West, something clearly the Russian character is not disposed to. Then a short way into his remarks, the Russian President stated for the first time publicly something that Russian intelligence has known for almost two decades but kept silent until now, most probably in hopes of an era of better normalized Russia-U.S. relations.

Putin stated that the terror in Chechnya and in the Russian Caucasus in the early 1990’s was actively backed by the CIA and western Intelligence services to deliberately weaken Russia. He noted that the Russian FSB foreign intelligence had documentation of the U.S. covert role without giving details.

What Putin, an intelligence professional of the highest order, only hinted at in his remarks, I have documented in detail from non-Russian sources. The report has enormous implications to reveal to the world the long-standing hidden agenda of influential circles in Washington to destroy Russia as a functioning sovereign state, an agenda which includes the neo-nazi coup d’etat in Ukraine and severe financial sanction warfare against Moscow. The following is drawn on my book, “The Lost Hegemon” to be published soon…

This is your big read of the day---and is an absolute must read for any serious student of the New Great Game.  It put in an appearance on the journal-neo.org Internet site a week ago Friday and, not surprisingly, it's courtesy of Roy Stephens---and is another piece that had to wait for a spot in my Saturday missive.

New Silk Road vs. TPP: East and West Enter 'War' For Dominance in Eurasia

As China's New Silk Road project is seemingly aimed at a "revolutionary change" in the global economic map, it may lead to a serious confrontation between the East and the West over Eurasian dominance, says U.S. analyst Robert Berke.

Washington's new Trans-Pacific Partnership (TPP) initiative that leaves out both China and Russia, has clearly demonstrated that U.S. participation in China's New Silk Road project seems unlikely while its "opposition is all but certain," American energy financial analyst Robert Berke stated in a recent article on Oilprice.com.

"The [New Silk Road] project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between east and west for dominance in Eurasia," the financial analyst stressed.

The New Silk Road is expected to connect Asia, Europe and Africa.

This article was posted on the sputniknews.com website at 6:27 p.m. Moscow time on their Friday evening---and it's definitely worth reading.  Once again I thank Roy Stephens for digging it up for us.

China Jams U.S. Spy Drones Over Disputed South China Sea Islands

China tried to electronically jam U.S. drone flights over the disputed South China Sea in order to prevent surveillance on man-made islands Beijing is constructing as a part of an aggressive land reclamation initiative, U.S. officials said.

Global Hawk long-range surveillance drones were targeted by jamming in at least one incident near the Spratly Islands, where China is building military facilities on Fiery Cross Reef, the Washington Free Beacon reported.

That statement follows Thursday reports that the Chinese navy warned a U.S. surveillance plane to leave the same area eight times in an apparent effort to establish and enforce a no-fly zone, a demand Washington rejected.

This news item appeared on the sputniknews.com Internet site at 11:00 p.m. Moscow time on their Friday evening, which was 4 p.m. EDT.  It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.

Two more Hong Kong stocks collapse after Hanergy crash

Two of Hong Kong's best-performing stocks plunged more than 40 percent Thursday, a day after a mysterious crash of almost 50 percent in Chinese solar firm Hanergy that saw almost $20 billion wiped off its market value.

Goldin Financial sank 43.34 percent to HK$17.48 and Goldin Properties crashed 40.91 percent to HK$14.36, after soaring more than 300 percent since the start of January, according to Bloomberg News.

The companies, which have interests ranging from property development in Hong Kong and China to vineyards in California and France are owned by Chinese tycoon Pan Sutong.

The dramatic sell-off came after a 47 percent dive in Beijing-based solar energy firm Hanergy Thin Film Power (HTF).

This business-related AFP story, filed from Hong Kong on Thursday local time, ended up on the terradaily.com Internet site---and it's worth skimming.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on Friday’s release of economic data, BitGold’s recent merger with Gold Money, the lending of more funds to Greece by the European Central Bank, and the smash in gold on yesterday morning.

This 11:18 minute audio clip with host Geoff Rutherford was posted on the sprottmoney.com Internet site yesterday evening.

BitGold to acquire GoldMoney for shares in transaction estimated at C$52 million

BitGold Inc., a platform for savings and payments in gold, announces that it has entered into an acquisition Agreement to purchase the operating and intellectual property assets of GoldMoney Network Ltd., subject to regulatory approvals and other customary closing conditions.

With over C$1.5 billion in assets under vault management, GoldMoney is among the world's largest private managers of precious metal assets, renowned for its innovation and integrity in the gold market.

Upon closing of the acquisition agreement, BitGold will acquire the intellectual property and operating assets of GoldMoney in exchange for the issuance of 11,169,794 common shares in BitGold, valuing the transaction at C$51.9 million based on BitGold's C$4.65 closing price on May 21. The transaction is expected to close within 60 days.

This news item, filed from Toronto, showed up on the businesswire.com Internet site yesterday at 07:50 a.m. EDT---and I found it embedded in a GATA release.

Koos Jansen: Chinese gold leasing is much lower than establishment claims

Welcome to another episode of understanding how mainstream consultancy firms (the World Gold Council, GFMS, CPM Group, Precious Metals Insights) understate Chinese gold demand. One of their main arguments is that hundreds if not thousands of tonnes are tied up in Chinese Commodity Financing Deals (CCFDs). As it was first stated by the World Gold Council (China’s Gold Market Progress And Prospects, April, 2014):

No statistics are available on the outstanding amount of gold tied up in financial operations [CCFDs] linked to shadow banking but Precious Metals Insights believes it is feasible that by the end of 2013 this could have reached a cumulative 1,000 tonnes.

Many mainstream news outlets, such as Reuters and the Financial Times, copied this segment, writing something along the lines of “1,000 tonnes is tied up in financing deals, it’s all a fraud and when this will be unwound the gold will flush the Chinese market”. In reality there was not 1,000 tonnes tied up in financing deals in 2013, as was portrayed by the WGC report.

This rather brief commentary appeared on the bullionstar.com Internet site early yesterday morning Singapore time---and I thank Koos for passing it around.  It's worth reading.

Kronen Zeitung: Austria Repatriates 110 Tonnes of Gold From U.K.

Austria is repatriating gold from the vaults at the Bank Of England (BOE) at this very moment, according to Kronen Zeitung. The OeNB (central bank of the Republic of Austria) stored 82 % of its 280 tonnes at the depository in England. It will start by bringing back 110 tonnes to Austria, to eventually have 50% on its own soil. 

This was to be expected as Austria has steadily working to move more of its official gold reserves from unallocated to allocated accounts in recent years, and additionally reduced its gold leased out by a staggering 60%.

This is another brief commentary from Koos---and it appeared on the bullionstar.com Internet yesterday afternoon Singapore time.  It's definitely worth reading as well.  Here's the Zero Hedge spin on this story---and it's headlined "Austria Confirms Faith in Fiat Fading: Repatriates 110 Tons of Gold From BoE"---and I thank reader 'David in California' for passing that one around yesterday morning.

China on a gold standard? Food for thought at least -- Lawrence Williams

On Friday at Bloomberg’s own  Precious Metals forum in London, Hoffmann gave a further short talk setting out the hypothesis – seeing the possibility of China going down this route as a possible Black Swan scenario.  While, in a short article released at the event he admits that the backing of the yuan fully by gold is an exercise that is highly unlikely and that in any case the Chinese government would not wish to have its monetary policy hands tied to the extent a traditional gold standard would suggest.  Indeed he admits that while the debate on this is an interesting one, ‘the idea of China on the gold standard is likely to remain in the alchemist’s lab for now’.

So what Hoffmann has done is to bring the idea of a Chinese introduction of some form of gold standard into the debate and for that he should be praised rather than vilified by those who find the whole idea counter to their own views.  The Chinese are indeed capable of springing surprises on the West.  As pointed out earlier the Chinese have a different way of thinking than us westerners.  They tend to operate with the kind of long term game plan no longer even considered in most capitalist countries and with a centrally controlled economy are perhaps far better placed to implement economic reforms which are to their ultimate benefit which might be considered impossible in the Western thought train.

So while a Chinese return to some kind of gold standard may be extremely unlikely, one perhaps should not write the idea off as totally impossible, and Hoffmann has done us a favour in getting us to think outside the box ourselves.

This short commentary by Lawrie was posted on his own website yesterday---and it's worth the read as well.

¤ The Funnies

As I was waiting quietly late on Sunday afternoon, this fellow flew in.  He's not the sort of bird you sneak up on, as it would be long gone before you got close enough for a photo, regardless of how big your lens was.  Once he started search for tidbits amongst the rocks, he paid me no mind.  This is a spotted sandpiper---and they're found just about everywhere in North America.  This is one I had to look up in the bird book---and it's a bit smaller than a robin.

¤ The Wrap

It must be remembered that the crooked bookmaking operation in COMEX silver is visible in many ways. For one, it is reflected in the fact that the biggest 4 and 8 commercial bookies have always held such a dominant control on the market that COMEX silver has the largest concentrated short position of any regulated commodity in terms of real world production or consumption. I know this has been true just about forever and because of that longevity, the shock value of what it represents gets diminished over time. But now with silver down close to 70% from the highs of 2011, the existence of the most concentrated short position of all commodities should be a much bigger deal than it ever was before.

The simple fact is that there is no economic justification for a commodity down in price as much as silver---and at or below the primary cost of production to have a larger concentrated short position than any other commodity. This is particularly true when no legitimate producer holds any of the concentrated short position; only large banks and financial institutions engaged in a bookmaking scam.

Because the silver bookmaking scam is becoming more clear to observers on a daily basis, I am becoming more convinced the scam is about to blow up and with it, the ongoing manipulation of the price of silver. If what I’ve just described is close to being accurate (and I believe it is completely accurate), the end game resides in my recent discovery that JPMorgan has acquired hundreds of millions of ounces of actual silver. - Silver analyst Ted Butler: 20 May 2015

Today's pop 'blast from the past'  was composed in 1946.  It was recorded by many artists, however it wasn't a hit until Bobby Darin recorded it back in 1958---but it wasn't released until 1959.  This youtube.com video clip [in B&W] shows him with a very young Dick Clark.  The link is here.

Today's classical 'blast from the past' is known by just about everyone on Planet Earth.  The work is  best known for its last movement, but the other movements are equally as wonderful if your a classical music affectionado.  It's the overture from Rossini's opera William Tell that was premiered in 1829.  The overture is in four parts, each following without pause.  It's performed here by the Berlin Philharmonic---and they serve it up just right.  It's worth your while---and the link is here

Yesterday's price action in the precious metals had all the hallmarks of another engineered take-down in precious metals by JPMorgan et al.  It should be obvious that they don't give a flying %$#& about the fact that they're about as subtle as a brick through a plate glass window.

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

In last Saturday's missive I gingerly made these comments about the current state of the rallies in both gold and silver  "Excuse me for thinking this, but the price action of the last couple of days has all the hallmarks of a top [hopefully temporary] in these rallies.  In addition to the cooling-off in the precious metal prices themselves, their associated equities have not exactly been roaring to the upside.  The charts below look toppy to me, as does the HUI."

In hindsight, and with the current COT numbers staring us in the face, I didn't know how right that statement would turn out to be.  And the fact that "da boyz" pulled it off in less than five trading days---and on such tiny rallies in both silver and gold---should indicate that they're not going to allow precious metal prices to go anywhere at the moment.

I have no qualms about stating the fact that current COT structure, even discounting it a bit for Tuesday's non-reported data, should scare the bejesus out of anyone.  It certainly does me.  The stage is set for a brutal take-down in the prices of gold, silver and platinum.  The only question remaining is will it be by one single thrust, or death by a thousand cuts?  I'd bet money on the latter, as "da boyz" can slice these precious metal salamis all summer long, all the while ringing the cash register in the process and declaring that the "summer doldrums" in the precious metals are upon us once again---doldrums that they themselves manufactured.

What a crock.

Looking at the above charts, seventy bucks or more in gold is not out of the question, as is two dollars in silver.  Remember, it's not the price, but the number of contracts.  Over the next few months JPMorgan et al will probably keep engineering prices lower until we reach some sort of capitulation at the end of the process.  This is their standard operating procedure.  That will occur, as it always does, when the Commercials have forced the Managed Money players to sell as many long contracts as possible---and enticed them to go as short as possible.  We've been down that road many times in the last four years, so you should know the drill by now.

The miners, the World Gold Council, The Silver Institute, GFMS, CPM Group et al---know it too, but pretend that it's not happening.  But we're so far down the road on this that they can't admit it now, or even make mention of it.  That includes the CFTC and the CME Group, which Ted Butler says, are actually enabling all of this.

The price management scheme in the precious metals is by far the most important criminal activity that the banks are involved in---as the ramifications of a free-market price in precious metals in particular---and commodities in general---would bring the entire world's economic, financial and monetary system to its knees overnight.

It's Jim Rickards "Currency Wars"---and the "Death of Money"---on steroids.  It will end in time, of course, but for the moment the war against the producing class by the West's financial elite goes on.  I consider it to be a line item in the Wolfowitz Doctrine as well.

The Russians and Chinese are more than aware of all of this---and if push really becomes shove, you just never know what might happen.

That's all I have for the day---and the week.  If the precious metal markets are open on Monday, I'll certainly have a report on Tuesday.

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

Ed Steer

Sat, 23 May 2015 06:57:00 +0000
<![CDATA[China’s Gold Purchases: Separating Facts From Speculation—Koos Jansen]]> http://www.caseyresearch.com/gsd/edition/chinas-gold-purchases-separating-facts-from-speculation-koos-jansen/ http://www.caseyresearch.com/gsd/edition/chinas-gold-purchases-separating-facts-from-speculation-koos-jansen/#When:04:11:00Z "Da boyz took another tiny slice off the gold salami"

¤ Yesterday In Gold & Silver

The gold price chopped around slightly above the unchanged mark until just after 1 p.m. in Hong Kong and then began to head lower, with the low tick coming minutes after 9 a.m. EDT.  It rallied a bit going into the London p.m. gold 'fix'---and from there it didn't do a lot.

The high and lows were reported by the CME Group as $1,212.40 and $1,200.80 in the June contract.

Gold closed in New York yesterday at $1,206.80 spot, down an even three dollars from Wednesday's close.  Net volume was very light at only 89,000 contracts.

It was virtually the same price pattern in silver---and with the metal trading in a twenty cent range all of yesterday, the high and low ticks aren't worth the effort to look up.

Silver finished the Thursday session at $17.13 spot, up 5.5 cents from Wednesday---and net volume was exceedingly light as well, only 19,500 contracts.

Platinum chopped around unchanged all through Far East and most of Zurich trading, but began to head south shortly before 2 p.m. Zurich time.  Like gold and silver, the low tick came a couple of minutes after 9 a.m. in New York.  From there it rallied back to almost unchanged, closing at $1,154 spot, down a buck from Wednesday.

Palladium chopped around five dollars either side of unchanged all day yesterday---and closed up 4 bucks at $779 spot.

The dollar index closed late on Wednesday afternoon in New York at 95.59.  It dropped 20 basis points in early Far East trading, but gained it all back---plus a few basis points more---by 2:30 p.m. Hong Kong time, and thirty minutes before the London open.  From there it began to head south, with the 95.01 low tick coming minutes after 11 a.m. BST in London.  But by shortly before 9 a.m. EDT, the index was back to 95.43---and after another 20 basis point up/down move, closed the Thursday session at 95.40---down 19 basis points on the day.

The gold stocks opened flat, but headed into negative territory to stay by 10:20 a.m. EDT.  Their lows came around 2:15 p.m.---and they struggled higher into the close.  The HUI finished down 0.36 percent---it's fifth losing session in the last six trading days.

The silver equities traded in a similar pattern---and almost managed to squeeze a positive close, but got sold back into the red about fifteen minutes before the equity markets closed.  Nick Laird's Intraday Silver Sentiment Index closed down 0.25 percent.

The CME Daily Delivery Report showed that zero gold and 30 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.   JPMorgan stopped 17 of them---8 for its client account and 9 for itself.  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 for May fell 42 contracts, leaving 82 still open.   Silver o.i. for May was unchanged at 289 contracts---less the 30 mentioned in the prior paragraph.

There were no reported changes in GLD yesterday---and as of 9:33 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

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

Analysis of the 20 May 2015 bar list---and comparison to the previous week's list:  5,519,099.8 troy ounces were removed (almost all from Brinks London)---787,993.3oz were added---and none had serial number changes.

The bars removed were from: Henan Yuguang (1.7M oz), Inner Mongolia Qiankun (0.9M oz), Korea Zinc (0.6M oz), and 21 others.

The bars added were from: Kazzinc (0.3M oz), Solar Applied Materials (0.2M oz), and 4 others.

As of the time that the bar list was produced, it was overallocated 420.8oz.  All daily changes are reflected on the bar list.

After two days in a row of no sales, the U.S. Mint finally had something to say for itself.  They reported selling 6,000 troy ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and 340,000 silver eagles.

Over at the COMEX-approved depositories on Wednesday, there was hardly any gold activity worth mentioning, as only 500 troy ounces were received---and nothing was shipped out.  It was virtually the same in silver.  Nothing was received---and only 146,602 troy ounces were shipped out the door.

It was another monster day over at the gold kilo warehouses in Hong Kong on their Wednesday.  At Brink's, Inc. they reported receiving an eye-watering 24,015 kilobars---and shipped out an equally impressive 17,331 kilobars.  There was a small deposit at the Malca-Amit Far East Ltd. depository, as they took in 220 kilobars.  The link to all that activity, in troy ounces, is here.

I have the usual number of stories for a week-day column---and I hope there are a few in here that you consider worth reading.

¤ Critical Reads

Economic Hope Crashes By Most Since 2013 Government Shutdown

Consumer Comfort is now the lowest it has been since Dec 2014 as Bloomberg's sentiment index continues to track the pain of higher gas prices better than the gain of higher stock prices. This is the biggest 6-week plunge in sentiment since Oct 2013. What is more worrisome is 'hope' is plunging. Economic Expectations fell by the most since Oct 2013 - the government shutdown - having fallen for 3 straight months. It appears the trickle-down popularity of seeing a Green Dow print every night on the news does not make the average Joe feel any better about the world after all???

This 2-chart Zero Hedge piece from 10:07 a.m. EDT on Thursday morning is worth thirty seconds of your time---and I thank Dan Lazicki for today's first story.

2015's Lowest Volume, VIX Crush, and Data Dump Send Stocks to Record Highs


In the last 12 hours  - China PMI Miss/Drop, Japan All Activity Index Miss/Drop, France Services PMI Miss, German Manufacturing & Services PMI Miss/Drop, Eurozone Composite PMI Miss/Drop, Chicago Fed National Activity Index Miss/Drop, Initial Jobless Claims Miss/Drop, U.S. Manufacturing PMI Miss/Drop, Bloomberg Consumer Comfort Plunge, Philly Fed Miss/Drop, E.U. Consumer Confidence Miss/Drop, Existing Home Sales Miss/Drop, Kansas City Fed Collapsed... and Stocks Surge...

This Zero Hedge piece appeared on their website about thirty-five minutes after the markets closed yesterday---and if you're a chart junkie, this story is for you.   It's the second offering in a row from reader Dan Lazicki.

Stocks and bonds are about to crash: David Stockman

David Stockman explains why the stock and bond market could be on the verge of a collapse.

This 3:33 minute CNBC video clip was posted on their website about noon on Thursday---and it's the third contribution in a row from Dan L.

Rising Bank Repossessions Push Up Foreclosure Activity in April

A surge in bank repossessions of properties last month pushed overall foreclosure activity across the United States to an 18-month high, according to a report by industry firm RealtyTrac released on Thursday.

Overall, 125,875 homes across the country were at some point in the foreclosure process in April, a 3 percent jump from March. The increase drove foreclosure activity up 9 percent from year-ago levels, RealtyTrac said.

April's jump in foreclosure activity, which includes foreclosure notices, scheduled auctions and bank repossessions was mainly driven by a 25 percent rise in repossessions.

A total of 45,168 homes were reclaimed by banks in April, up 50 percent from a year ago, bringing bank repossessions to their highest levels in 27 months.

This news item was posted on the newsmax.com Internet site at 10:23 a.m. EDT on Thursday morning--and I thank West Virginia reader Elliot Simon for sending it along.

Once-Unthinkable Criminal Pleas by U.S. Banks Get Investor ‘Meh’

Investors yawned at the news Wednesday that five of the world’s biggest banks, including JPMorgan Chase & Co. and Citigroup Inc., agreed to plead guilty in a currency-rigging probe. They’re among six banks that will pay $5.8 billion in fines.

Barely more than a year ago, criminal charges against major U.S. banks were considered unthinkable, with lawyers and analysts viewing felony convictions as a death sentence and a threat to the financial system. Now, by granting waivers allowing lenders to keep operating even after a felony plea, the government has managed to punish firms while protecting them from fatal consequences.

This is the first time you had Citigroup, JPMorgan or any U.S. bank plead guilty essentially to criminal conduct -- this is a bad day for American finance,” Mike Mayo, an analyst at CLSA Ltd., said in a televised interview with Bloomberg. “Having said that, this is more backward-looking than forward-looking.”

Like I said yesterday, dear reader, until the guys in the corner suites and the boardrooms are looking at large numbers of years in orange jump suits at the Crowbar Hilton, nothing will change.  These are just licensing fees---felony convictions or not.  This news item appeared on the Bloomberg Internet site at 3:30 p.m. Denver time Thursday afternoon---and it's the second offering in a row from Elliot Simon.

JPMorgan’s Jamie Dimon Deals With His Bank’s Felony Charge – Badly

After more than 200 years of operation, yesterday JPMorgan Chase became an admitted felon. That action for foreign currency rigging came less than two years after the bank was charged with two felony counts and given a deferred prosecution agreement for aiding and abetting Bernie Madoff in the largest Ponzi fraud in history. The felony counts came amid three years of non-stop charges against JPMorgan Chase for unthinkable frauds: from rigging electric markets to ripping off veterans to charging credit card customers for fictitious credit monitoring and manipulating the Libor interest rate benchmark.

Against this backdrop of a serial crime spree on the part of employees on multiple continents and coast to coast in the United States, JPMorgan released a statement yesterday regarding the bank pleading guilty to a felony charge for engaging in the rigging of foreign currency trading, calling it “principally attributable to a single trader.” In the statement, Dimon says the bank has a “historically strong culture.”

Dimon is, if nothing else, a master of the grand illusion.

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

"We Reached The Tipping Point": Income Inequality is Highest Since Records Began

While soaring stock prices do nothing to boost the economy, because as 7 years of hard facts have shown, the only thing "trickle down" QE has done is forced economists to jump the shark and demand not one but two seasonal adjustments to goal seek collapsing economic data, the S&P hitting new all time highs on a daily basis has certainly succeeded in one thing: pushing inequality around the globe, and especially in the US, to new record highs.

And earlier today the latest OECD report confirmed just that, when it reported that gap between the rich and poor in most of the world's advanced economies is at record levels.

In most of the 34 countries in the Organisation for Economic Cooperation and Development the income gap is at its highest level in three decades, with the richest 10 percent of the population earning 9.6 times the income of the poorest 10 percent.

In the 1980s this ratio stood at 7 to 1, the OECD said in a report.

This longish article, also from the Zero Hedge website yesterday morning, is also courtesy of Dan Lazicki.

The E-Mail That Helped Catch Barclays: ‘ISDAfix Is Manipulated’

Sometimes ISDAfix is manipulated.

Those words, taken from an e-mail written by a Barclays Plc options trader, came back to haunt the bank Wednesday as it settled U.S. government allegations that it attempted over five years to rig one of the world’s most important rate benchmarks.

The Commodity Futures Trading Commission released some of the more than 1 million e-mails and recorded phone calls gathered during its nearly three-year investigation to show how the attempted manipulation worked.

It was a simple process, according to the CFTC: Barclays traders told their brokers to buy or sell as many interest-rate swaps as needed just before 11 a.m. New York time to push the benchmark in the desired direction.

This Bloomberg article appeared on their website at 2:59 p.m. Mountain Daylight time on Wednesday afternoon---and my thanks go out to Howard Wiener for finding it for us.

Defiant Greeks force Europe to negotiating table as time-bomb ticks

Europe's creditor powers have started to wobble. Berlin, Paris and Brussels are coming to the grim conclusion that Greece may not capitulate as expected, and time is running out fast.

Athens is now warning openly that the "moment of truth" will come on June 5, when the country faces default on a €300m payment to the International Monetary Fund, unless the EU authorities hand over the next tranche of bail-out cash.

It would be hazardous to bet the integrity of monetary union on the assumption that this is just a bluff.

This must read Ambrose Evans-Pritchard commentary appeared on the telegraph.co.uk Internet site at 9:30 p.m. BST on Wednesday evening---and I thank Roy Stephens for sharing it with us.

German, Russian and Chinese companies race to buy up Greek infrastructure

Foreign corporations from countries including Germany, China and Russia are lining up to buy Greek state assets as the country struggles to pay its European creditors.

The sell-off includes major parts of Greece's infrastructure such as airports, ports, motorways and utilities., The website of the agency leading the government's privatisation drive details a host of real estate ready to be sold off, with deals listed as either 'in progress', 'rolling ahead' or 'completed'.

The move marks a U-turn from the ruling Left-wing Syriza party, who had previously resisted the privatisation programme imposed as part of the conditions attached to Greece's €245bn bailout from the so-called troika of the IMF, European Central Bank (ECB) and European Commission.

This story appeared on the europe.newsweek.com Internet site at at 6:35 p.m. on Wednesday.  No time zone was stated, so it can be assumed that it's EDT.  A reader who wishes to remain anonymous sent it our way yesterday.

Washington asks Athens to back anti-Russia sanctions - Greek minister

Greece has revealed it’s been asked by the U.S. to prolong anti-Russia sanctions. However, Athens stressed Russia is a strategic ally and the ‘sanction war’ is causing it an estimated loss of €4 billion a year.

"I was asked to support the prolongation of the sanctions, particularly in connection with Crimea. I explained the Ukrainian issue was very sensitive for Greece as some 300,000 Greeks live in Mariupol and its neighborhood, and they feel safe next to the Orthodox Church, " Defense Minister Panos Kammenos is cited as saying on the Ministry of National Defense website on Wednesday.

Russia is Greece's ally and a friendly country, our countries have "unbreakable ties" of common religion, and we have economic ties as well, the Minister told the Deputy US Defense Secretary Christine Wormuth during their meeting in Washington.

This story showed up on the Russia Today website at 1:51 p.m. Moscow time on their Thursday afternoon, which was 6:51 a.m. EDT in Washington.

Obama Denies U.S. Losing War Against ISIL Despite Failure in Ramadi

On Sunday, following days of heavy fighting against Iraqi government forces, ISIL took control of the Sunni-dominated provincial capital of Ramadi, some 70 miles west of Baghdad.

No, I don’t think we’re losing,” Obama said in the interview. “There’s no doubt there was a tactical setback, although Ramadi had been vulnerable for a very long time.

The U.S. president attributed the fall of Ramadi to lack of Iraqi military training and command-and-control structures in Sunni areas of the country.

Hundreds of Iraqi security forces were killed and many more fled, prompting Iraqi Prime Minister Haider al-Abadi to call in Shiite militias to the outskirts of Ramadi to protect the capital and Shiite cities to the south.

This news item, filed from Washington, showed up on the sputniknews.com Internet site at 8:03 p.m. Moscow time on their Thursday evening, which was 1:03 p.m. in Washington.  It's courtesy of reader M.A.

With ISIS Controlling "More Than Half of Syria", the U.S. Prepares to Pounce

Just hours after ISIS scored a significant victory in Iraq when it captured the town of Ramadi over the weekend, the first Iraqi town that had been actively defended by the US as opposed to just Iraqi troops, overnight ISIS also captured the ancient Syrian town of Palmyra, which the mainstream media promptly concludes was proof that the Islamic State's momentum was growing.

Around a third of the 200,000 people living in Palmyra may have fled in the past few days during fighting between government forces and Islamic State militants, the U.N. human rights office said on Thursday.

That's not all: according to Reuters, "extending its reach in the region, fighters loyal to the Sunni Muslim group have also consolidated their grip on the Libyan city of Sirte, hometown of former leader Muammar Gaddafi."

"ISIL has reportedly been carrying out door-to-door searches in the city, looking for people affiliated with the government. At least 14 civilians are reported to have been executed by ISIL in Palmyra this week," Shamdasani said in e-mailed comments.

This Zero Hedge article showed up on their website at 3:53 p.m. on Thursday afternoon---and it's the second contribution in a row from reader M.A.

China to spend billions as it seeks Latin American inroads

China and Brazil have unveiled multi-billion dollar trade, finance and investment deals as Premier Li Keqiang kicked off his first official trip in Latin America this week.

Landing first in Brazil, Li saw a raft of agreements signed, ranging from a $1 billion purchase of passenger jets made by Brazil’s Embraer to the lifting of an import ban on Brazilian beef. Infrastructure investment plans also include a controversial project to build a railroad that would slice across the Amazon and the Andes mountain range.

“A new road to Asia will open for Brazil, reducing distances and costs, a road that will take us directly to the ports of Peru and, across the Pacific Ocean, China,” President Dilma Rousseff said in reference to the rail link, inviting Chinese companies to build it.

“China wants to build the railway equivalent of the Panama Canal in the region,” Jean-François Dufour, president of the DCA Chine-Analyse consulting company, told FRANCE 24.

This news item was posted on the france24.com Internet site on Wednesday sometime---and my thanks go out to Roy Stephens for his final offering in today's column.

The Gold Chronicles: May 18 , 2015 Interview with Jim Rickards

This audio interview with Jim runs for 57 minutes.  It's his monthly chat with the folks over at the Physical Gold Fund.  It was recorded on Monday---and I thank Harold Jacobsen for sending it along yesterday.

Reuters: CME developing European gold futures contract

The Chicago Mercantile Exchange is developing a European gold futures contract to serve customers in London, three sources familiar with matter said, which could present a direct challenge to London's traditional cash market.

The contract would mirror existing futures traded on CME's New York COMEX platform, which has a 100-ounce contract size and typically trades volumes of between 15 million and 20 million ounces daily.

That is the world's most liquid gold contract, essentially setting the benchmark for bullion futures globally.

"The CME has been working on a loco (deliverable in) London futures contract for a while," one source familiar with the matter said. "Comex futures are deliverable at Comex warehouses, but instead with London futures you would take delivery at your London vault. Potentially they would see a lot more futures being delivered if customers could have London gold."

I must admit that I wasn't happy to see this story, so I fired it off to Ted Butler----and here is his response---"A little known fact is that the vast majority of al the new contracts introduced by the CME fail miserably. I would put this contract in that category, but time will tell."  This Reuters piece, filed from London, appeared on their website at 4:23 p.m. BST yesterday afternoon London time--and I found it embedded in a GATA release.

Gold demand slows as China eyes equities; lack of weddings in India weighs

Gold buying was slow this week in Asia even as global benchmark prices dropped from a three-month high, with the Chinese hooked on surging equities while demand in India stayed weak and was unlikely to pick up as the wedding season cools.

Premiums for bullion over international spot prices dropped in Hong Kong while prices in India were on par with the global benchmark.

"Demand is extremely slow. Customers are focusing on equity markets and aren't really interested in gold for the time being," said Dick Poon, general manager at Heraeus Precious Metals in Hong Kong.

Gold premiums in Hong Kong dropped to around 50 cents an ounce, he said, from over a dollar last week.

Considering the frantic pace that gold is being imported into both India and China, one wonders how seriously this story should be taken.  This Reuters article, filed from Singapore, appeared on their website at 11:06 a.m. IST on their Friday morning---and it's something I found on the Sharps Pixley Internet site at 2 a.m. EDT.

Koos Jansen: China's gold purchases -- separating facts from speculation

Gold researcher and GATA consultant Koos Jansen outlines the arguments for and against thinking that the People's Bank of China obtains gold through the Shanghai Gold Exchange, a determination critical to estimating how much metal has been brought into the country's gold reserves.

Jansen is inclined to think that the central bank is obtaining its gold outside the exchange and outside "visible" channels, since government purchases of gold can be the most sensitive state secrets. Jansen's very long commentary is headlined "PBOC Gold Purchases: Separating Facts from Speculation" and it was posted on the bullionstar.com Internet site yesterday.  I thank Chris Powell for the introductory paragraphs above.

¤ The Funnies

This fellow is a red-necked grebe---and is very common through most of northern North America, some parts of Europe---and Russia.  And like most grebes, it's only see from a distance.  But if you sit very still for long enough, eventually they forget you're there---and you get photos like these.  This is the male.  The female was sitting on the nest some distance away.

¤ The Wrap

As I’ve written previously, there was no way that JPMorgan or anyone else could have acquired the equivalent of 350 million ounces or more in silver in the form of COMEX silver futures contracts. Enough observers and market participants now monitor the COT data (I think I’ve had some influence in this) that it would be impossible for a 70,000 contract net long position to go unnoticed, to say nothing about it being far above any position limits that the CFTC might ever institute. As it stands now, the concentrated net position of the four largest long traders in COMEX silver has rarely been above 25,000 contracts, so an individual trader holding 70,000 long contracts would seem impossible.

More to the point, it just isn’t conceivable that the potential selling and short selling capacity necessary to accommodate any trader to create and hold a 70,000 contract long position exists. In other words, if JPMorgan did make the decision four years ago to accumulate a massive long position in silver that I believe it did make, this bank was smart enough to know it couldn’t be done via COMEX silver futures. The only possible alternative was for the bank to acquire physical silver, which it did in spades. Not coincidentally, holding physical silver is the same best suggested way of holding silver that I (and many others) have long advocated. Admittedly, it is somewhat bittersweet to see JPMorgan adopt that advice. - Silver analyst Ted Butler: 20 May 2015

It was another down day yesterday, but volume was so light, not much should be read into the price action, although "da boyz" took another tiny slice off the gold salami.  And as much as I don't want to see it, I'm expecting more of this sort of price action in the future.  As I said the other day, the only thing we don't know is how low in price---and how long JPMorgan et al will take to get the job done.

Of course the critical 50-day moving averages are pretty close in both gold and silver, so the price pain shouldn't be all that great.  However, as Ted has drilled into me over the years, it's not the final price that's important, but the number of contracts involved.

Here are the 6-month charts for all four precious metals---and you can see the tiny slice in gold for yourself, as we made a new low for this current move down.

And as I write this paragraph, the London open is about ten minutes away.  Prices are marginally higher at the moment in gold, silver and platinum.  Palladium is unchanged.  Net gold volume is a bit over 10,000 contracts---and silver's net volume is only 2,700 contracts.  Based on these tiny volumes, nothing should be read into the current price action.  The dollar index has been sliding throughout all of Far East trading on their Friday---and bounced off the 95.00 level for the second time in less than twenty-four hours.  It's currently down 35 basis points.

Today we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and as I said before, there should be massive deterioration in the Commercial net short positions in both gold and silver.  But these number will be somewhat tempered by the engineered price declines on Tuesday.   The other unknown is just how much of Tuesday's price/volume numbers will be in today's report, as not all the data may be reported in a timely manner.

Here's more of what Ted had to say about Tuesday's engineered price decline in his Wednesday commentary---and it's effect on today's COT Report...

"So what about the big price smash on Tuesday? It looked like the same old HFT and spoofing bookie scam as always. The way it works is first the commercial bookies rig prices up thru the key moving averages and then the Pavlovian technical funds respond by buying futures contracts at the higher prices levels, as they did from last Wednesday thru Monday. Then the commercial bookies fix the game to the downside below the moving averages and the technical funds sell at the lower prices. That’s the essence of the COMEX silver and gold scam."

"What was somewhat different this time is that the move up and down was so compressed in the reporting week, that the COT report covering the turnaround won’t be published until Friday, thus resulting in the inability to rely on the COT report this time. I don’t think this was accidental, but rather deliberate. Considering that there had been significant managed money buying in COMEX gold and silver on the sharp move up last week, accompanied by equally significant commercial bookie selling, the current price weakness makes it clear that the bookies are inducing the technical funds to sell. This is what the CME crime syndicate is all about."

And as I file today's column at 5:15 a.m. EDT, I note that the prices of gold, silver and platinum spiked a bit very shortly after London opened.  Of course the not-for-profit sellers were there soon after---and are attempting to hammer these rallies flat, although the jury is still out on whether they'll be able to accomplish that. Palladium isn't doing a thing.

Net gold volume is a bit over 22,000 contracts at the moment, which is more than double what it was ten minutes before London opened---and silver's net volume is sitting at 6,100 contracts net, also more than double what it was the last time I reported on it more than two hours ago.

The dollar index bounced off the 95.00 level once again---and it appears that "gentle hands" are at work here.  Right now the index is down 38 basis points.

Since today is Friday, all bets are off as to how precious metal prices perform, or will be allowed to perform---and, as usual, nothing will surprise me when I check the charts later this morning.

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

Ed Steer

Fri, 22 May 2015 04:11:00 +0000
<![CDATA[Russia’s Central Bank Purchases Another 300,000 Troy Ounces of Gold in April]]> http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchases-another-300000-troy-ounces-of-gold-in-april/ http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchases-another-300000-troy-ounces-of-gold-in-april/#When:04:23:00Z "I'm just sitting here waiting for the other shoe to drop"

¤ Yesterday In Gold & Silver

After the the two hour sell-off going into the London open, the gold priced inched higher until shortly after the p.m. gold fix was in at 10 a.m. EDT in New York.  After that it chopped quietly sideways into the close.

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

Gold finished the Wednesday trading session at $1,209.80 spot, up $1.80 from Tuesday's close.  Net volume was on the lighter side at 101,000 contracts, with almost a third of that coming before the London open.

It was more or less the same price action in silver, but the obvious sell-off of the quiet rally that occurred at 10:30 a.m. EDT really stands out---and from there it got sold back to unchanged by 3:30 p.m.  It traded flat into the close of electronic trading.

The high and low ticks were reported by the CME Group as $17.28 and $16.935 in the July contract.

Silver closed yesterday at $17.075 spot, up a half a cent.  Net volume was 29,500 contracts.

Here's the New York Spot Silver [Bid] chart from yesterday---and you can see for yourself how precise the timing was of the smack-down in the smallish silver rally at 10:30 a.m. yesterday.  The pop in price at the release of the Fed minutes was taken away as well.

Platinum also got sold down a bit going into the London open, but recovered within an hour or so before chopping sideways for the remainder of the Wednesday session.  Platinum finished the day at $1,154 spot, up 5 bucks from Tuesday.

Ditto for palladium, but the subsequent rally off its pre-London open low tick got dealt with at the COMEX open.  It's low came at noon EDT---and it managed to close up only a dollar from Tuesday at $775 spot.

The dollar index closed late on Tuesday afternoon in New York around 95.30---and although it made it as high at about 95.80 in late afternoon trading in Hong Kong on their Wednesday afternoon, it fell back to around the 95.50 mark after the London open---and chopped sideways for the rest of the Wednesday session, closing at 95.59---up only 9 basis points on the day.

The gold stocks opened up a bit---and chopped sideways until minutes before the Fed minutes were released at 2 p.m. EDT.  They powered higher from there, but willing sellers showed up about 2:30 p.m. as the gold price sagged a few dollars---and by the time the equity markets closed in New York yesterday, most of those gains had vanished, as the HUI closed up only 0.13 percent.

The silver equities traded more or less in the same pattern---and the sell-off at the 10:30 a.m. EDT is obvious on the chart below, as is the up/down pattern after the Fed minutes were released.  Nick Laird's Intraday Silver Sentiment Index closed up 0.63 percent.

The CME Daily Delivery Report showed that no gold or silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in May fell by 15 contracts, leaving 124 still open.  Silver o.i. dropped by 8 contracts, which still leaves 289 left.

There was another withdrawal from GLD yesterday.  This time it was 99,510 troy ounces.  Since May 1 there has been 765,356 troy ounces of gold removed from GLD---and not a single troy ounce deposited.  And as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in both their gold and silver ETFs for the week ending Friday, May 15---and this is what they had to report.  Their gold ETF added 4,234 troy ounces---and their silver ETF increased by 49,672 troy ounces.

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

There wasn't a lot of activity in gold over at the COMEX-approved depositories on Tuesday.  They only received 4,600 troy ounces---and shipped 99 ounces out the door.  It was much busier in silver as 783,763 troy ounces were reported received, but only 6,250 troy ounces were shipped out.  All the 'in' activity was at the CNT Depository and Canada's Scotiabank.  The link to that action is here.

It was another frantic day at the gold kilobar depositories in Hong Kong on their Tuesday.  They received 9,158 kilobars---and shipped out 10,588 kilobars.  These are huge amounts of gold, dear reader---and the link to that activity in troy ounces is here.

Since yesterday was the 20th of the month, the folks over at The Central Bank of the Russian Federation updated their Internet site with April's data.  It showed that they added 300,000 troy ounces of gold to their reserves, which now stands at 40.1 million troy ounces.  Here's Nick's most excellent chart showing the change.

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

¤ Critical Reads

Big banks plead guilty to currency market-rigging conspiracy, will pay $5.8 billion

Six of the world's biggest banks will pay $5.8 billion and five of them agreed to plead guilty to charges tied to a currency-rigging probe as they seek to wind down almost half a decade of enforcement actions.

Citicorp, JPMorgan Chase & Co., Barclays Plc, and Royal Bank of Scotland Plc agreed to plead guilty to conspiring to manipulate the price of U.S. dollars and euros in settlements with the Justice Department announced in Washington today. The main banking unit of UBS Group AG agreed to plead guilty to charges related to interest-rate manipulation. The Swiss bank, the first to cooperate with antitrust investigators, was granted immunity in the currency probe.

The four banks that agreed to plead guilty to currency charges are among the world's biggest foreign-exchange traders. They were accused of colluding to influence benchmark rates by aligning positions and pushing transactions through at the same time. Traders who described themselves as members of "The Cartel" used online chat rooms to discuss their positions in the minutes before the rates were set, the Justice Department said.

That leaves only the precious metal markets that JPMorgan et al haven't been been found guilty of rigging, but you know that they're doing it, even if they're never found guilty of it.  This Bloomberg story appeared on their Internet site at 8:00 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.  The New York Times spin on this, courtesy of Roy Stephens, is headlined " Rigging of Foreign Exchange Market Makes Felons of Top Banks".  BUT NOBODY'S GOING TO JAIL!!!  And until that happens, this will never end.

Trannies Tumble, S&P/Dow Give Up Week's Gains

Bond yields are leaking higher, The U.S. Dollar is flat (but noisy), but with no macro data to spark a momo run, U.S. equities have tumbled out of the gate... especially Dow Transports. Dow and S&P are back to unchanged on the week...

BTFD? Well we are sure the FOMC Minutes will be spun dovishly.

Trannies are in trouble again - Down 6% YTD... worst start to a year since 2009

This story appeared on the Zero Hedge website less than twenty minutes after the equity markets opened yesterday---and it's courtesy of Dan Lazicki.  The two embedded charts are worth a glance.

Stocks Pump-And-Dump After Ministry of Truth 'Manipulation' Trumps Spoofing Algos

Thanks to the spoofing, stocks soared to record highs after the FOMC Minutes to prove that everything is awesome---but then CNBC broke the news that BEA will double-seasonally-adjust GDP data - implicitly enabling Q1 to look better and thus giving Janet more room to hike in June  - and stocks sunk...

The bottom line: stocks were so obviously manipulated higher today after FOMC to prove the Fed is right it was disgusting... not just the actual indications of spoofing but the fact that stocks entirely decoupled from the "DEADNESS" of every other asset class after the minutes hit.

Then when BEA hit with their agreement over double-seasonal-adjustments, the farce was complete, stocks tanked on the bad news.

This chart-filled commentary from Zero Hedge showed up four minutes after the closing bell yesterday---and it's worth a minute of your time.  It's also the second offering in a row from Dan Lazicki.

Stocks Slump After Liesman Reports GDP to Be "Double Seasonally-Adjusted" Upward

The San Francisco Fed decided that the weak Q1 GDP data simply needed to be seasonally adjusted (again) in order to make it ...well, less weak.

The official estimate of real GDP growth for the first three months of 2015 was shockingly weak. However, such estimates in the past appear to have understated first-quarter growth fairly consistently, even though they are adjusted to try to account for seasonal patterns. Applying a second round of seasonal adjustment corrects this residual seasonality. After this correction, aggregate output grew much faster in the first quarter than reported.

Got that? There was still some "residual seasonality" (i.e. the data still looked weak) in the Q1 print after the first round of seasonal adjustments, so in order to "correct" things, a second round of seasonal adjustments needs to be applied, after which the new figures should show that the economy did not in fact flat-line in the first three months of the year. Of course if the numbers still don't come out looking the way you want them, you can always rinse and repeat. As we put it two days ago:

And if the double seasonally adjusted data doesn't work? Why triple adjust it, then quadruple adjust it, until you get precisely the goalseeked number you want, as US economic "data" promptly devolve to a level of ridiculousness that will make even the Chinese Department of Truth turn green with envy.

Sure enough, just moments ago, CNBC's Steve Liesman (who else) reports that the double seasonal adjustments are indeed in the works.

Well, dear reader, things are just getting more outrageous all the time.  This is another Zero Hedge article from Wednesday afternoon that's courtesy of Dan Lazicki.

Even Harvard Economists Admit Fed Policy Has "Created Dangerous Risks"

No lesser establishment economist than Martin Feldstein - Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research - has some warning words of wisdom for The Fed today: "...the Fed’s unconventional monetary policies have also created dangerous risks to the financial sector and the economy as a whole." When even The Ivory Tower is losing faith, you know The Fed is in trouble...

This commentary by Feldstein was embedded in another Zero Hedge piece from yesterday---and it's also courtesy of Dan L.

The Treasury Bond Bull Market Will Persist -- Jim Rickards

How many times have you heard the phrase “bond bubble” in the past three years?

It seems that every time you turn on financial television or go to a financial website, there’s an analyst warning you about a bond bubble about to burst. The commentary usually consists of the observation that “interest rates are near an all-time low” and “have nowhere to go but up.”

There’s not much more to the analysis than that. In fact, interest rates are near all-time highs and could drop significantly, setting off one of the greatest bond market rallies in history.

Allow me to explain…

This commentary by Jim appeared on the dailyreckoning.com Internet site yesterday sometime---and it's another contribution from Dan Lazicki. [Note: Jim says that "Russia invaded Crimea in 2014".  They did not.  Crimea voted over 90 percent to return to Russia from whence they came, after being "gifted" to the Ukraine by Khrushchev in 1954 - Ed] 

For Caterpillar, This is What the "Second Great Depression" Looks Like

According to the latest CAT retail sales data, Caterpillar has now reported an unprecedented 29 months of declining global retail sales, with the month of April seeing a 16% Y/Y collapse in China (after a 25% plunge in 2014 and a 20% plunge the year before), while Latin America just suffered an epic 44% Y/Y crash, the biggest going back to 2009, after a 28% drop the year before.

Or as far as the industrial and heavy equipment bellwether is concerned, the emerging markets (or BRICS) are in an unprecedented economic collapse.

To put Caterpillar's ongoing second great depression in context, during the Great Financial Crisis, CAT suffered "only" 19 months of consecutive retail sales declines. As of April 2015, this number is now 29, and there is no hope in sight of seeing an annual rebound any time soon.

This short Zero Hedge article appeared on their Internet site at 10:55 a.m. EDT on Wednesday morning---and it's definitely worth your time.  This is the real economy talking.  Once again I thank Dan Lazicki for finding it for us.

Paul wages Patriot Act filibuster with call for an 'open rebellion'

Presidential hopeful Sen. Rand Paul is speaking from the Senate floor Wednesday in what he is calling a filibuster of extending the Patriot Act.

"I will not let the Patriot Act, the most unpatriotic of acts, go unchallenged," Paul said. "The bulk collection of all Americans' phone records all of the time is a direct violation of the Fourth Amendment."

Paul's hours-long speech also marks a potentially savvy political move, allowing the Kentucky Republican, and his presidential campaign, to dominate the media spotlight for hours Wednesday afternoon.

Paul brushed aside criticisms from his colleagues that letting the Patriot Act expire would threaten national security.

"Couldn't we just for a couple of hours live under The Constitution?" he asked.

This commentary was posted on thehill.com website at 2:03 p.m. EDT yesterday afternoon---and the stories from Dan just keep on coming.

Euro slides on Greece default fears

The euro fell to a two-week low on Wednesday following a Greek government warning that it will miss the June 5 IMF payment deadline without a deal with the Troika by then.

The single currency traded at $1.1115, down 0.4 percent at 11:36 a.m. MSK on Wednesday. It declined 0.71630 against the British pound and 134.34 against the Japanese yen.

“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5. If there is no deal by then that will address the current funding problem, they won’t get any money.”

The country owes more than €320 billion to its external creditors, and is counting on a €7.2 billion International Monetary Fund loan installment. Last week the country raided its International Monetary Fund reserves for a €750 million debt payment to the IMF.

This news item appeared on the Russia Today website at 11:45 a.m. Moscow time on their Wednesday morning, which was 4:45 a.m. EDT in Washington.  I thank Roy Stephens for sending it along.

The Adults Are Back——Kerry Throws In the Towel on Ukraine

The U.S. seems to admit it overplayed its hand over Ukraine. Caving to reality is actually the best possible policy.

It is just as well Secretary of State John Kerry’s momentous meetings with Russian leaders last week took place in Sochi, the Black Sea resort where President Putin keeps a holiday home. When you have to acknowledge that two years’ worth of pointless hostility in the bilateral relationship has proven none other than pointless, it is best to do so in a far-away place.

Arriving in the morning and leaving in the afternoon, Kerry spent three hours with Sergei Lavrov, Russia’s very competent foreign minister, and then four with Putin. After struggling with the math, these look to me like the most significant seven hours the former senator will spend as this nation’s face abroad.

Who cannot be surprised that the Obama administration, having turned the Ukraine question into the most dangerous showdown since the Cold War’s worst, now declares cordiality, cooperation and common goals the heart of the matter?

The question is not quite as simple as one may think.

This commentary falls into the absolute must read category for any serious student of the New Great Game---and is the only absolute must read in today's column.  I was going to save it for Saturday for length reasons, but after having read it myself, I though it best to insert it into today's missive.  It was posted on the salon.com Internet site on Tuesday at 5 p.m. Denver time---and I borrowed the above headline from David Stockman's reposting of it.  The actual headline reads "John Kerry admits defeat: The Ukraine story the media won’t tell, and why U.S. retreat is a good thing"---and I thank Roy Stephens for bringing it to my attention---and now to yours.

Washington Throws in the Towel on Ukraine, Shifts to 'Plan B'

Obama has thrown in the sponge for Ukraine, Eric Zuesse underscored, adding that Washington is now "on-board with the ‘Plan B’ for Ukraine," which means implementing the provisions of the Minsk II accord.

International media have failed to highlight the ultimate failure of Washington's policy in Ukraine, investigative historian Eric Zuesse emphasized, referring to remarks by U.S. Secretary of State John Kerry in response to Petro Poroshenko's oath to retake Crimea and the Donetsk Airport.

"I have not had a chance – I have not read the speech. I haven't seen any context. I have simply heard about it in the course of today [which would be shocking if true]. But if indeed President Poroshenko is advocating an engagement in a forceful effort at this time, we would strongly urge him to think twice not to engage in that kind of activity, that that would put Minsk in serious jeopardy. And we would be very, very concerned about what the consequences of that kind of action at this time may be," John Kerry said during a press conference in Sochi, as cited by the historian.

Eric Zuesse stressed that the remark has clearly demonstrated that the Obama administration has thrown in the towel on Washington's original plan for Ukraine, which was purportedly aimed at an all-out military invasion of the eastern regions.

This news story, filed from Moscow, showed up on the sputniknews.com Internet site at 7:26 p.m. Moscow time on their Wednesday evening---and it's certainly worth reading.  I thank Roy Stephens for his second article in a row.

Russia to take legal moves if Ukraine defaults on $3bn debt - finance minister

Russia will appeal to the International Court of Justice if Ukrainian President Petro Poroshenko signs a moratorium on the payment of Ukraine’s external debt into law and fails to pay its debt to Russia, said Russian Finance Minister Anton Siluanov.

Siluanov said Ukraine was virtually defaulting on its debt, adding that Russia doesn’t yet have grounds to lodge any claims. If Kiev fails to pay $75 million in June, Moscow will use its right to appeal to the court, the Minister said.

The Ukrainian parliament has adopted a law allowing the country not to pay foreign debt to private lenders, saying it needs to protect the ailing economy and people from “unscrupulous” creditors.

The bill says the $3 billion in Ukrainian Eurobonds purchased by Russia at the end of 2013 are on the list of liabilities subject to a possible payment moratorium.

This article put in an appearance on the Russia Today website at 11:01 a.m. Moscow time yesterday morning---and I thank Roy Stephens for sharing it with us.

China Factory Index Shrinks for 3rd Month

A report says manufacturing in China shrank for the third month in a row in May as demand remained soft, raising the chances of further stimulus from Beijing.

The preliminary version of HSBC's purchasing managers' index came in at 49.1. That's slightly better than the 48.9 recorded in April but still in contractionary territory on the 100-point index. Numbers above 50 indicate expansion.

The report said that factory production decreased from last month's no-change level, falling to its lowest in 13 months.

This short AP story ended up on the abcnews.go.com Internet site at 10:35 p.m. EDT Wednesday evening---and I thank West Virginia reader Elliot Simon for digging it up for us.  It's worth a quick read.

Against Beijing? U.S. Holds Asian Military Summit, Excludes China

As the United States struggles to maintain influence in the South China Sea, it has pushed Pacific nations to assert themselves against Beijing. In that effort, Washington organized a gathering of military leaders from over 20 countries, specifically excluding China.

A first-of-its-kind event, the United States hosted the PACOM Amphibious Leaders Symposium in Hawaii for Pacific nation commanders to discuss amphibious military capabilities. In attendance are representatives from Japan, Australia, the Philippines, Malaysia, Vietnam, and many others.

During the event, military leaders were flown aboard the USS Essex and given a demonstration of the U.S. Marines amphibious assault capabilities.

This news item appeared on the sputniknews.com Internet site at 2:16 a.m. Moscow time on their Thursday morning, which was 7:16 p.m. Wednesday evening in Washington.  Once again I thank Roy Stephens for sending it our way.

Ray Dalio Slams Buffett For Being "Wrong on Gold", Says "Social Disruption" is Inevitable

Given the recent resurgence of precious metals and the looming 'endgame' of Federal Reserve faith, we thought dusting off the following 160 seconds of uncomfortable truth from Bridgewater's Ray Dalio was worthwhile...

"We're beyond the point of being able to successfully manage this... and I worry about another leg down in the economy causing social disruption... Hitler came to power in 1933 because of the social tension between the factions."

"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money.  Warren Buffett is making a big mistake."

This 2:40 minute video clip is of unknown age, as the opening paragraph states "dusting off"---but it certainly is worth watching if you haven't seen it before, which I hadn't.  I thank Dan Lazicki for his final contribution to today's column.

It’s Time to Hold More Cash and Buy Gold -- Citigroup

Gold is a regarded as a hedge against market turbulence by Bank of America who, in a note to clients, advised holding gold and paper currency at this time.

Bloomberg report that Bank of America Merrill Lynch describe the markets as being in a “Twilight Zone” – the zone between the end of QE and the Fed beginning to raise rates to try to bring normality back into the markets.

To deal with this they advocate adding gold to one’s portfolio along with higher levels of cash. Citing factors such as liquidity, profits, technological disruption, regulation, and income inequality they say there exists a potential for a “cleansing drop in asset prices.

This commentary appeared in Mark O'Byrne's column over at the goldcore.com Internet site yesterday---and it's certainly worth skimming.

UBS Shielded From Charges in U.S. Precious-Metals Probe

UBS Group AG won immunity from criminal fraud charges in a Justice Department investigation into misconduct in the trading of precious metals.

The Swiss bank’s main UBS AG unit won’t be charged by the department’s criminal division for information the firm disclosed to prosecutors about precious-metals transactions, according to the company’s plea agreement released on Wednesday to resolve a probe into interest-rate manipulation.

Prosecutors have been investigating whether at least 10 banks, including Barclays Plc, JPMorgan Chase & Co. and Deutsche Bank AG, manipulated prices of precious metals such as silver and gold, Bloomberg reported in February. The scrutiny follows international probes into the rigging of financial benchmarks for rates and currencies, which have yielded billions of dollars in fines.

This Bloomberg news item was posted on their website at 1:01 p.m. yesterday afternoon Denver time---and I found it on the Sharps Pixley website in the wee hours of this morning.

Indian banks doubt that gold paperization scheme will do much

A proposal in India to attract thousands of tonnes of gold owned by households into a bank deposit scheme will likely fail in its current form as it does not address some key concerns for banks and consumers.

Support from banks would be crucial for the success of the monetisation plan. Deposit schemes, similar to the one proposed on Tuesday by the Narendra Modi-led government, have previously failed as the incentives offered were not profitable for banks.

The idea is to attract gold lying idle among Indian homes into the banking system. This amounts to an estimated 20,000 tonnes of gold -- or almost seven times global annual output.

This gold-related Reuters article, co-filed from Singapore and Mumbai, was posted on their website at 9:24 a.m. EDT on Wednesday morning.  It's actual headline is "India's gold monetisation plan lacks lustre - industry"---and I found it in another GATA release.  It's not overly long---and it's worth reading, as it goes hand-in-hand with the other stories on this issue that appeared in my Wednesday column.

Chinese Gold Standard Would Need a Rate 50 Times Bullion's Price

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion's price now, according to Bloomberg Intelligence.

A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there's no evidence that the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published today. Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said.

Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote. Theoretically, to create an exchange rate of one ounce of gold for every $64,000, the country would need about 10,000 metric tons of the metal, they estimated. That's nine times the nations official holdings and about 6 percent of all the bullion ever mined globally.

Well, dear reader, I don't know about you, but I'd be happy with a gold price five times what it is now.  This Bloomberg article showed up on their Internet site at 5:16 a.m. MDT yesterday morning---and I found it on the gata.org Internet site.

Will China go for a gold standard? The jury is out! -- Lawrence Williams

I listened today (20th May) to an exceedingly interesting presentation by Ken Hoffmann, Bloomberg’s Global Head of Metals & Mining Research at the very well attended Global Mining Finance Precious and Base metals event in London. The talk was entitled ‘China: Brace for a hard landing and a new ‘Gold Standard’ and related to research conducted by Bloomberg analysts which was only released about half an hour earlier than the talk.

While Hoffmann may not have answered the question posed by the talk title directly, and a ‘gold standard’ in the old sense may not be realistic given that to back the yuan physically with gold would require either more gold than the world has ever produced (at the current price levels) or perhaps if China can accumulate 10,000 tonnes of gold, a gold price of $64,250 an ounce would be required. (China currently has official holdings of 1,054 tonnes as reported to the IMF, but is widely believed to have accumulated far more held in separate accounts not yet reported to the IMF.  Bloomberg analysts suggested it might have an additional 2,500 tonnes in such accounts – others put the figure rather higher, but until and unless China comes clean with a ‘true’ figure we just don’t know – and even then we may still not know for sure given the somewhat opaque nature of Chinese government statistics).

Lawrie has a go at the Bloomberg story posted above---and this very interesting commentary of his is worth your while.  It was posted on the mineweb.com Internet site at 4:22 p.m. BST in London yesterday---and the first reader through the door with it was Roy Stephens.

Americans Fear Beijing, Moscow May Introduce New Gold Standard

China is planning to introduce the gold fixing reference price in yuan. Americans fear that China could introduce a new gold standard to displace the dollar, DWN reported.

The competition for London gold-market has grown after the Chinese Shanghai Gold Exchange (SGE) established an International Chamber of Commerce in the free trade zone of the city, providing for free capital flows, Deutsche Wirtschafts Nachrichten reported.

China is the world's largest gold producer and is, logically, interested in the possibility to influence the determination of the gold price.

According to a market participant, China will have its fixing price before the end of the year, with the country experiencing a rapid development of its gold market, Financial Times reported.

This is another interesting article on the same issue---and it seems to have come out entirely independently of the above two stories.  This one appeared on the sputniknews.com Internet site at 4:37 p.m. Moscow time on their Wednesday afternoon, which was 9:37 a.m. EDT in New York.  It's the final offering of the day from Roy Stephens, for which I thank him.

¤ The Funnies

These water birds are horned grebes---and are very common around this part of Canada in the summer time.  Both sexes are magnificent in their respective breeding plumages---and to tell you the truth, I don't know which is which, but I guess it's only important that they know the differences.  Its "horns" are yellowish patches of feathers behind its eyes that it can raise and lower at will.

¤ The Wrap

Where do I get off accusing the COMEX and CME of running a crooked shop whether you call it market making or a bookie operation? For nearly 30 years I’ve argued that COMEX silver has facilitated the silver manipulation in violation of the terms of commodity and interstate commerce law; but let me do so today in terms of what constitutes a crooked bookie. If there’s one thing in which no one would disagree, a bookie would be considered unquestionably crooked if he took measures to ensure the outcome of a sporting event, such as paying players in a college basketball game to deliberately shave points in a game or otherwise perform badly enough to affect the outcome. In essence, that’s exactly what the COMEX has encouraged in silver. How so?

First, if a bookie never lost when he took a big line on any sports event that should raise suspicions of rigged games. After all, there is no way a freely contested event could always fall within the odds to the bookie’s favor. Let me stop here and agree that it’s not the COMEX or the CME taking the bets that never lose, but certain favored members, like JPMorgan and other large institutions. The CME provides the infrastructure that enables the real bookies to take the bets of speculators (technical funds) in silver, gold, copper and other commodities. The CME gets kickbacks from everyone who places bets on the COMEX, but sees to it that the most favored member bookies always win.

Data from the federal commodities regulator, in the form of the weekly Commitments of Traders Report (COT) confirm that the biggest bookies, like JPMorgan, have never, to my knowledge, incurred any losses in taking the other side to what the technical funds have ever bet. Some smaller bookies or commercial traders have suffered a rare setback or two over the years, but the biggest silver bookies, like JPMorgan? Never have they lost. That’s the sure sign that the COMEX silver game is fixed –  when the biggest bookies never lose. - Silver analyst Ted Butler: 20 May 2015

Except for the dip in all four precious metals in the two hours leading up to the London open, all was quiet yesterday in the precious metal market.  Even the tiniest hint that prices might rally was met by a willing seller, probably of the HFT variety.  And the FOMC minutes release at 2 p.m. EDT had no impact on p.m. prices.  For a change, all was quiet on the currency front as well.

Here are the 6-month charts for all four precious metals as of the close of trading on Wednesday.  There's not much to see---and I'm just sitting here waiting for the other shoe to drop, as I don't believe that this engineered price decline that started on Tuesday is close to being over---although I'd love to be spectacularly wrong about that.

And as I type this paragraph, the London open is about ten minutes away.  The gold price certainly didn't do much in Far East trading on their Thursday---and just about the same can be said of the other three precious metals as well.  Silver is up 8 cents---and palladium is up 2 bucks.

Net gold volume is a hair over 14,000 contracts at the moment, which is fairly decent for this time of day---and about ten percent of the gross volume is roll-overs out of the June contract.  Silver's net volume is a handful of contracts under the 3,000 mark.  The dollar index, which has been chopping sideways in a pretty tight range over the last twenty-four hours, is flat at the moment.  Nothing to see here, either.

Tomorrow we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and as I expected, Ted didn't want to be nailed down as to what the report might say, either.  Here's a paragraph on this issue from his mid-week column yesterday---"I’m not even sure what the COT report will show on Friday. Before Tuesday’s price smash, I would have assumed an extreme increase in the total commercial net short position, along the lines of what I mentioned on Saturday (40,000+ in gold and 10,000 to 20,000 contracts in silver), although surprises were possible. [But] after Tuesday, I would have assumed some moderation in those expected increases, but that’s the problem with sharp up and down moves within the reporting week, namely, it scrambles objective analysis."

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT, I see that the dollar index made it as high as 95.65 around 2:30 p.m. Hong Kong time, thirty minutes before the London open---and has been heading lower ever since.  At the moment it's down 50 basis points from Wednesday's close in New York.

However, this is not being reflected in the gold price, as it's trading basically unchanged at the moment.  Net volume is just under 22,000 contracts, which isn't overly heavy.  Silver is up a dime---and volume is just over 4,400 contracts, which is also on the lighter side. Platinum and palladium are up a couple of bucks each.

I must admit that I have no clue as to what may be in store for the precious metals for the remainder of the Thursday trading session, but as is usually the case, any price action of significance will occur once the COMEX opens at 8:20 a.m. EDT in New York.

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

Ed Steer

Thu, 21 May 2015 04:23:00 +0000
<![CDATA[CME Group, With JPM Nod, to Launch Zinc Futures Contract on the COMEX]]> http://www.caseyresearch.com/gsd/edition/cme-group-with-jpm-nod-to-launch-zinc-futures-contract-on-the-comex/ http://www.caseyresearch.com/gsd/edition/cme-group-with-jpm-nod-to-launch-zinc-futures-contract-on-the-comex/#When:04:16:00Z "This is getting tiresome, but it's not like you weren't warned"

¤ Yesterday In Gold & Silver

The gold price was under choppy selling pressure up until ten minutes after the COMEX open in New York yesterday morning---and at that point the HFT boyz and their algorithms went to work, with most of the damage done by around 10:35 a.m. EDT.  The gold price traded flat after that, but the absolute low tick was a quick down/up spike minutes before 11:30 a.m.

The high and low tick were reported by the CME Group as $1,225.50 and $1,205.10 in the June contract.

Gold closed in New York on Tuesday at $1,208.00 spot, down $17.80 from Monday's close.  Net volume was 149,000 contracts, but I was expecting more than that.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  The two big volume spikes occurred when 'da boyz' spun their algorithms, or spoofed the market.  The dark gray line is midnight EDT---and don't to forget to add two hours for EDT, as this charts is MST.  The 'click to enlarge' feature works wonders.

The silver price was already down by 30 cents when the HFT boyz spun their algorithms at 10:20 a.m. EDT---and in less than fifteen minutes had shaved another 55 cents off the price.  Once the low was in, the price crept higher into the close.

The high and low ticks were recorded as $17.735 and $16.87 in the July contract, an intraday move of over 4 percent.

Silver closed yesterday at $17.07 spot, down 61 cents from Monday.  Net volume was very decent at 55,500 contracts.

Platinum also got its head handed to it starting just after 12 o'clock noon in London---and when JPMorgan et al were done with it in COMEX trading, the price was down 27 bucks to $1,148 spot.

Palladium turned in a mini version of what happened in the platinum market, as it closed at $773 spot, down 12 dollars from Monday.

The dollar index closed late on Monday afternoon in New York at 94.16---and began to show signs of life to the upside around 2 p.m. in Hong Kong trading.  But the real rally began minutes before the London open, with most of the gains coming shortly before 9 a.m. EDT---and then did next to nothing after that.

You should carefully note that the dollar index had posted virtually all of its gains before "da boyz" and their HFT buddies put in an appearance in New York.

Here once again is the 6-month rally in the U.S. Dollar index chart complete with yesterday's 'action'.

The gold stocks gapped down---and quietly chopped lower for the remainder of the day, as the HUI closed on its absolute low tick, down 4.08 percent---giving up almost half its 2015 gains in the process.

The silver stocks fared little better---and their rally attempts after the morning silver price take-down didn't amount to much.  The silver equities closed on their absolute low ticks as well.   Nick Laird's Intraday Silver Sentiment Index closed down 3.91 percent.

The CME Daily Delivery Report showed that 8 gold and 1 lonely silver contract were posted for delivery within the COMEX-approved depositories on Thursday.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in May dropped by 2 contracts to 139 contracts remaining.  Not surprisingly, silver o.i. for May took a 127 contract hit after the yesterday's delivery notices were filled today.  Silver open interest is down to 297 contracts.

There were no changes in GLD yesterday---and as of 9:30 p.m. EDT yesterday evening, there were no reported changes in SLV either.

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

There wasn't much activity in gold at the COMEX-approved depositories on Monday.  There was 34,370 troy ounces reported received over at HSBC USA---and nothing was shipped out.

It as much busier in silver, as 963,879 troy ounces were shipped in---but only 17,298 ounces were shipped out the door.  Most of the 'in' activity as at Canada's Scotiabank and Brink's Inc.  The link to that action is here.

Over at the gold kilobar depositories in Hong Kong on their Monday, they received 3,000 kilobars---and shipped out 3,218 kilobars.  All of the activity was at Brink's, Inc.---and the link to that is here.

I don't have a lot of stories today---and after the treasure trove I had in Tuesday's column, that's quite all right by me.

¤ Critical Reads

Housing Starts Surge to Highest Since Nov 2007, Permits at 7 Year Highs

Following two ugly months of dramatically missed expectations, Housing Starts exploded to 'recovery' highs (highest since Nov 2007) jumping 20.2% MoM to 1.135million (against 1.015 exp.). This is the 2nd biggest MoM jump in history.

Both single-family (3rd biggest MoM surge since the crisis peak) and multi-family starts surged. Permits also surged in April (jumping 10.1% MoM - the most since 2012) to 1.143 million (well above expectations) and the highest since June 2008.  and  Well these huge mal-investment spikes make perfect sense in light of the collapse in lumber prices (and thus demand).

This chart-filled Zero Hedge piece from 8:40 a.m. EDT on Tuesday morning is worth running through---and I thank reader M.A. for today's first story.

Bond-Market Crash Has Wall Street Divided on What’s Next

Maybe, just maybe, this whole bond rout is ending.

The global sell-off that’s set investors on edge finally slowed last week, and some analysts are saying the worst is over. Treasuries look fairly valued given the outlook for inflation and interest rates, according to Bank of America Corp. -- although with plenty of caveats. In Germany, options traders convinced a bund-market crash was all but inevitable less than two weeks ago have scaled back most of those bets.

Goldman Sachs Group Inc. warns that government debt is still expensive, but a growing number of investors are finding value after the four-week exodus sent yields soaring. Prudential Financial Inc.’s Robert Tipp is buying because tepid U.S. growth will keep the Federal Reserve on hold, while Europe remains too weak to sustain higher yields.

“There’s a good chance people will look back at this as having been a good buying opportunity,” Tipp, the chief investment strategist at Prudential’s fixed-income unit, which manages $560 billion, said from Newark, New Jersey.

This Bloomberg article from Sunday afternoon Denver time was something I found in yesterday's edition of the King Report.

Someone Finally Read Obama's Secret Trade Deal and Admits the TPP "Will Damage This Nation"

I’ve Read Obama’s Secret Trade Deal. Elizabeth Warren Is Right to Be Concerned. 

"You need to tell me what’s wrong with this trade agreement, not one that was passed 25 years ago,” a frustrated President Barack Obama recently complained about criticisms of the Trans Pacific Partnership (TPP). He’s right. The public criticisms of the TPP have been vague. That’s by design—anyone who has read the text of the agreement could be jailed for disclosing its contents. I’ve actually read the TPP text provided to the government’s own advisers, and I’ve given the president an earful about how this trade deal will damage this nation. But I can’t share my criticisms with you.

I can tell you that Elizabeth Warren is right about her criticism of the trade deal. We should be very concerned about what's hidden in this trade deal—and particularly how the Obama administration is keeping information secret even from those of us who are supposed to provide advice.

So-called “cleared advisers” like me are prohibited from sharing publicly the criticisms we’ve lodged about specific proposals and approaches. The government has created a perfect Catch 22: The law prohibits us from talking about the specifics of what we’ve seen, allowing the president to criticize us for not being specific. Instead of simply admitting that he disagrees with me—and with many other cleared advisers—about the merits of the TPP, the president instead pretends that our specific, pointed criticisms don’t exist.

I posted a story about this in my Saturday column, I believe---but here's the Zero Hedge take on it---and it's definitely worth reading.  I thank Dan Lazicki for sharing it with us.

U.K. Inflation Falls Below Zero for First Time Since 1960

Britain’s inflation rate fell below zero for the first time in more than half a century, as the drop in food and energy prices depressed the cost of living.

Consumer prices declined 0.1 percent in April from a year earlier, the Office for National Statistics said in London on Tuesday. Economists had forecast the rate to be zero, according to the median of 35 estimates in a Bloomberg News survey. Core inflation slowed to 0.8 percent, the lowest since 2001.

With inflation so far below the Bank of England’s 2 percent target, policy makers are under little immediate pressure to raise the key interest rate from a record-low 0.5 percent. Governor Mark Carney said last week that any period of falling prices will be temporary and an expected pickup in inflation at the end of the year means the next move in borrowing costs is likely to be an increase.

“For now, it represents an obstruction to a BOE rate hike,” said Alan Clarke, an economist at Scotiabank in London. “Enjoy it while it lasts because there is a good chance that inflation will be back in positive territory next month.”

This Bloomberg article showed up on their Internet site at 2:30 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for finding it for us.

Europe faces second revolt as Portugal's ascendant Socialists spurn austerity

Europe faces the risk of a second revolt by Left-wing forces in the South after Portugal’s Socialist Party vowed to defy austerity demands from the country’s creditors and block any further sackings of public officials.

"We will carry out a reverse policy,” said Antonio Costa, the Socialist leader.

Mr Costa said a clear majority of his party wants to halt the “obsession with austerity”. Speaking to journalists in Lisbon as his country prepares for elections - expected in October - he insisted that Portugal must start rebuilding key parts of the public sector following the drastic cuts under the previous EU-IMF Troika regime.

The Socialists hold a narrow lead over the ruling conservative coalition in the opinion polls and may team up with far-Left parties, possibly even with the old Communist Party.

This Ambrose Evans-Pritchard commentary put in an appearance on the telegraph.co.uk Internet site at 6:00 p.m. BST yesterday evening, which was 1:00 p.m. in Washington.  I thank South African reader B.V. for bringing it to our attention.

Merkel Faces German Parliament "Revolt" on Greece

German Chancellor Angela Merkel is considering delivering a keynote address to make the case for aiding Greece as she faces down a potential revolt from as much as a third of her bloc’s lawmakers.

Merkel would hold the speech after Greece and its creditors agree on a deal with conditions she deems strong enough to sell to parliament and the German public, according to two government officials. She would argue that a Greek exit from the euro area would risk causing geopolitical instability in the region, said the officials, who asked not to be identified because the discussions are private.

Merkel’s desire to keep Greece in the euro is fraught with political risk given the level of exasperation in Germany with Prime Minister Alexis Tsipras after four months of brinkmanship. While some German policy makers have hardened their stance against helping Greece, others are hinting at more flexibility to avert a financial collapse.

“Should we seriously go and prescribe in detail what the Greeks are allowed to spend and what revenue they can have?” Deputy Finance Minister Thomas Steffen said in an interview. “I say no. It’s the rough framework that has to be clear.

This is the Zero Hedge spin on an embedded Bloomberg story from very early yesterday morning MDT---and it's worth reading.  It's another offering from Dan Lazicki.

Greek economy is bleeding 600 jobs a day, €22 million in GDP

The gridlock over the country's eurozone future is resulting in record numbers of lost jobs and a destruction in growth potential, according to figures from the Hellenic Confederation of Commerce and Enterprise (ESEE),

Since Syriza took office in late January, an average 59 small businesses have shut up shop, with approximately 613 jobs destroyed every single day, say ESEE.

Having suffered from the worst depression in the developed world since the 1930s - losing a quarter of its output - Greece's renewed political crisis has shattered the fragile business confidence in the country.

More than a third of all bank loans are now classed as "bad" (or non-performing), while the ESEE notes that more than 95pc of all applications for bank loans are rejected every day.

This news item was posted on The Telegraph's website at 1 p.m. London time on their Tuesday afternoon---and I thank Roy Stephens for sending it along.  It's worth reading.

Ukraine vote gives government power to suspend foreign debt payments

Ukraine’s parliament on Tuesday handed ministers the power to suspend foreign debt payments to defend against “unscrupulous” creditors.

The vote was the latest episode in an escalating row over a $25bn (£16bn) rescue package with the International Monetary Fund and European Union.

In case of attacks on Ukraine by unscrupulous creditors, this moratorium will protect state assets and the state sector,” the prime minister Arseniy Yatsenyuk said.

Finance minister Natalie Jaresko said the overwhelming vote in the Rada, allowing the government to suspend payments to Ukraine’s international sovereign debt-holders, was “an important protection for citizens who are already shouldering a heavy burden due to the war in the east”.

This story showed up on theguardian.com Internet site at 8:22 p.m. BST yesterday evening, which was 3:22 p.m. in New York.  The Bloomberg spin on this news item is headlined "Ukraine Piles Pressure on Creditors Payment-Delay Powers"---and both are courtesy of Jim Skinner.

Why the U.S. is Finally Talking to Russia -- Pepe Escobar

So a woman walks into a room… That’s how quite a few jokes usually start. In our case, self-appointed Queen of Nulandistan Victoria “F**k the E.U.” walks into a room in Moscow to talk to Russian deputy foreign ministers Sergei Ryabkov and Grigory Karasin.

A joke? Oh no; that really happened. Why?

Let’s start with the official reactions. Karasin qualified the talks as "fruitful", while stressing Moscow does not approve of Washington becoming part of the Normandy-style (Russia, Ukraine, Germany and France) negotiations on Ukraine. Not after the relentless demonization not only of the Kremlin but also of Russia as a whole since the Maidan coup.

Ryabkov, for his part, made it known the current state of the US-Russia relationship remains, well, corrosive.

This very interesting commentary by Pepe certainly falls into the must read category for any serious student of the New Great Game.  It appeared on the sputniknews.com website at 4:28 p.m. Moscow time on their Tuesday afternoon---and I thank U.K. reader Tariq Khan for sending it our way.

Warren Buffett and the Chinese Are Loading Up on Hard Assets

So, Warren Buffett comes with his own railroad. That means he has his own pipeline. So, Warren Buffett’s a guy who’s dumping paper money, getting into hard assets in the form of transportation and energy in particular. And the dollar could go to zero and it has no effect on him. He still owns a railroad

The other example are the Chinese. The Chinese have spent the last four years acquiring approximately 3,000 to 4,000 tons of gold. Now, how do we know that? We have some hard data. We know China’s mining output is about 450 tons a year. We know China’s imports through Hong Kong are coming in between 800 and 1,000 tons a year. This has been going on for four years so that’s kinda 6,000 tons there and where you have to use a little guesswork is okay, we know how much gold China is getting, how much is going to private consumption, how much is going to the government? We’re not as clear on that, but I use kinda half as the first approximation.

The gold is gonna go up like this so they’ve created a hedge where they win this way and they win this way so I would say look at China buying gold, look at Warren Buffett buying hard assets in energy and that will give some guidance. The two other ones, powerful, biggest, best and foreign investors in the world are getting out of paper money into hard assets.

This commentary by Jim is a rehash of what he's said before.  However, there is some new material in it, so it's still worth reading---and I thank Dan Lazicki for his final offering in today's column.

Buffett Takes a Page from the “Inflation King’s” Playbook

Hugo Stinnes is practically unknown today, but this was not always the case.

In the early 1920s, he was the wealthiest man in Germany at a time when the country was the world's third-largest economy. He was a prominent industrialist and investor with diverse holdings in Germany and abroad.

Chancellors and Cabinet ministers of the newly formed Weimar Republic routinely sought his advice on economic and political problems. In many ways, Stinnes played a role in Germany similar to the one Warren Buffett plays in the U.S. today…

He was an ultra-wealthy investor whose opinion was eagerly sought on important political matters, who exercised powerful behind the-scenes influence, and who seemed to make all the right moves when it came to playing markets.

This commentary by Jim Rickards showed up in the Casey Research publication "On The Radar"---and it's also worth your time.

History Shows a Gold Bull Market is Fast Approaching -- Jeff Clark

Yearning for sunnier skies for your gold investments? How’s this sound…

  • Gold in a decisive bull market, with the price steadily rising
  • Silver soaring and outpacing gold’s gains
  • Gold stocks rocking, erasing underwater positions and racking up the profits

That’s not pie in the sky wishful thinking—it accurately describes the next stage of the gold market, something that will soon visit your portfolio.

I'm hoping that Jeff has the inside track from Jamie Dimon, as it will be up to him [et al] if this comes to fruition.  But like you, dear reader, I'm praying he'll be right.  This commentary by Jeff showed up on the Casey Research website yesterday.

India would offer tax exemption for earnings in gold paperization scheme

India will allow citizens to deposit gold with banks to earn interest as the world's second-biggest consumer seeks to cut reliance on imports by tapping idle bullion lying with households.

Individuals and institutions can deposit a minimum of 30 grams in the form of bullion or jewelry under a so-called gold monetization scheme, according to a draft document released by the government today. The banks can set the interest rate on the deposits and the metal mobilized may be loaned to jewelers, the government said.

Success in drawing out a part of the more than 20,000 metric tons of gold lying with households and institutions like temples may help India lower dependence on imports and ease pressure on the current-account deficit. While the plan proposes to ensure steady supply of bullion to jewelers, banks may benefit from a new business in a country where gold is bought during festivals and marriages as part of the bridal trousseau or given as a gifts in the form of ornaments.

The monetization plan will be limited to select cities initially as it requires a vast setup of infrastructure for secure handling of gold, according to the draft plan. Customers will have the option of redeeming deposits either in cash or in gold with a minimum tenure of one year. Investors may be exempted from paying capital gains tax, wealth tax, and income tax, the draft showed.

Good luck getting this up and running!  This very interesting Bloomberg story is a must read.  The above headline is courtesy of GATA's Chris Powell, but the real headline states "India Moves a Step Closer to Tapping 20,000-Tonne Gold Hoard".  It was posted on the gata.org Internet site at 3:19 MDT yesterday morning.

Why India's latest gold paperization scheme will fail like the last one

The moot question is will the inhibitions that marred the earlier gold deposit scheme vanish. The answer sadly is in the negative.

The metal would be melted as hitherto much to the dismay and chagrin of women folk, to whom melting mangal sutra for example is abshagun, inauspicious and a strict no-no. That our ladies routinely lose out to the wicked jewelers on account of wastage but are finicky about melting on sentimental grounds need not detain us.

The tax exemptions mean a lot for those in the 30% income tax bracket as it would heighten the post-tax return on investments but temples and shrines like Tirumala Tirupati Dewastanam (TTD), Shirdi Sai Baba Trust, Mata Vaishneo Devi trust etc. are in any case tax-exempt.

And there is no guarantee that tax sleuths will not come calling hot on deposit, asking for the source, the irritant that bedeviled the earlier schemes as well.

Black money in this country finds sanctuary in real estate and gold. Gold has never come tumbling out of cupboards, lofts, and lockers enticed by interest, which pales before the tax consequences.

This extremely interesting article showed up on the firstpost.com Internet site at 8:15 a.m. India Standard Time [IST] on their Wednesday morning---and it's also worth reading.  I found it on the gata.org Internet site just before midnight Denver time last night.

Has Gold Mine Cost Cutting Gone As Far As It Can Go? -- Lawrence Williams

The past three years have seen a concerted effort by producing gold miners to cut costs but has this now run its course with all those costs that are within the control of the mining companies already slashed perhaps as far as they can be? Indeed over the past year, the miners have been able to claim falling costs primarily through beneficial factors outside their own control.

Think on it. Much of the actual cost cutting over the past two to three years has come from dropping capital projects, reducing exploration expenditures, laying off surplus staff, cutting out layers of administration and a small amount from improvements in mining technology. Disposals of less profitable operations to leaner and meaner rivals and the closure of the least economic mines have also been playing their part in company boards being able to point to better cost figures all round. These figures have also been enhanced by mining to higher grades - thus producing more gold without increasing basic operating procedures, so costs per ounce of gold produced have appeared to fall as a consequence. But are these measures at the expense of mine lives, new project development and overall longer-term corporate viability?

Take nearly all these factors. Reducing exploration expenditures and cutting back on capital projects is bound to affect the longer-term potential of the company making the cuts. High grading reduces overall ore reserves and mineral resources. The only real 'cost cuts' are those achieved via permanent labor and administration reductions, changes in the mining plan and processing efficiencies to improve figures and the removal of loss making and marginal operations through sale or closure. Once these have been made, one might argue there is little further the companies can do (apart perhaps from reducing some of the over the top pay packages commanded by senior executives, but in truth these have little overall effect on the bottom line for the bigger companies).

This commentary by Lawrie was posted on the seekingalpha.com Internet site early yesterday morning EDT---and it's definitely worth reading.

CME Group, with JPM nod, to launch zinc futures contract

CME Group Inc said on Monday it would launch a zinc futures contract next month, stepping up a global battle for metals market share with the London Metal Exchange amid expanding Asian markets.

CME’s announcement, which included a statement from JP Morgan Chase & Co expressing strong support for the move, said the new zinc contract will begin trading June 29. The first available U.S. delivery was targeted for October, pending regulatory reviews, CME said.

The statement did not explain JPMorgan’s role in the zinc contract, but a source familiar with the matter said JPMorgan “absolutely” intends to provide liquidity on the new market, adding to its existing market-making activities on the LME.

CME Group and JPMorgan team up to rig another market.  Well, dear reader, "providing more liquidity" is the same reason they use for being involved in the precious metal market---and that "liquidity" JPMorgan [et al] speak of is used to manage prices.   The question that begs to be asked is since they neither produce nor consume these metals, why are they there?  This Reuters article from yesterday found a home over at the mineweb.com Internet site---and it's worth skimming.

¤ The Funnies

The lesser scaup is a small and somewhat shy diving duck which can be found everywhere in Western Canada during the breeding season.  Most only get to see them from a distance, but with the help of a telephoto lens and some judicious cropping, the male is a rather handsome fellow in his breeding plumage.  Here are three different profiles that I took on Sunday.

¤ The Wrap

Recently, a bit of attention has been placed on my speculation about JPMorgan acquiring hundreds of millions of ounces of silver over the past four years. More seem to think my speculation is on the mark from what I can tell, but some observers disagree, often demanding concrete and incontrovertible proof about my claims.  However, if unquestioned proof was available, there would be no speculation necessary on my part and everyone would have seen what JPMorgan was up to.

The key feature for JPMorgan or anyone accumulating hundreds of millions ounces of silver at extremely depressed prices would be to do so without the public knowledge and the reaction that would cause silver prices to rise before the accumulation was complete. Is there any reason to think that JPMorgan could pull off what I claim they pulled off if everyone was aware of it from the get-go?  As it is, I have fully admitted that it took me years to figure out what this crooked bank was up to. To those that claim what I suggest is impossible, how about an alternative explanation for why we just had a massive withdrawal of metal from SLV on strongly surging prices and trading volume? - Silver analyst Ted Butler: 16 May 2015

This is getting tiresome, but it's not like you weren't warned well in advance.

As I said in my Saturday column---"Excuse me for thinking this, but the price action of the last couple of days has all the hallmarks of a top [hopefully temporary] in these rallies.  In addition to the cooling-off in the precious metal prices themselves, their associated equities have not exactly been roaring to the upside.  The charts below look toppy to me, as does the HUI."

Well, JPMorgan et al, along with their HFT buddies and their algorithms did to the precious metals yesterday what the monster rally in the U.S. dollar index couldn't.  The rally in the dollar index was pretty much done by the time the spoofing started on the COMEX in New York.  Yesterday's price action, like the price action on Monday, is just more proof that what the dollar index is doing is mostly irrelevant to gold and silver price.  It's 100 percent COMEX paper affair at all times---and at the end of June, JPMorgan et al get to add zinc to the list of metals they will control.

Here's the 6-month charts for all four precious metals, so you can see the hatchet jobs for yourself.

As you can tell from the above charts, the gold price is now back below its 200-day moving average---and although silver traded below that same average on Tuesday, it did not close below it.  Both platinum and palladium are back at their respective 50-day moving averages.

Now we're back to where we were two months ago.  How low in price and number of contracts are JPMorgan et al from another low where they've got the Managed Money traders minimum long and maximum short?  Will this engineered price decline be death by a thousand cuts, or will they take the proverbial axe to it like they did yesterday?

Of course the precious metal market could power higher at any time regardless of "all of the above"---and if it does, it will only happen if "da boyz" are instructed to allow it to happen.

At the moment, it's the same old, same old---and the miners just sit there knowing full well what's going on, and do nothing.  I'm sure that there are special favours going out to all and sundry at The World Gold Council, The Silver Institute, Gold Field Mineral Services and CPM Group for keeping the miners under control.

And as I type this paragraph, the London open is about fifteen minutes away.  After trading more or less flat through most of the Far East session on their Wednesday, gold and silver prices began to roll over starting around 1:45 p.m. Hong Kong time, just as the dollar index---which had also been trading ruler flat all night long---began to head higher.  Gold is down about three dollars---and silver is down 12 cents.

Net gold volume is already very decent at 18,500 contracts, with virtually all of that of the HFT variety.  Silver's net volume is a hair over 4,500 contracts---and all of its volume is in the current front month as well.

Platinum and palladium, which had been trading a few dollars higher through most of the Far East session are now respectively, down and flat on the day.  And with the London open now four minutes away, the dollar index is up 41 basis points.

Yesterday at the close of the COMEX trading session was the cut-off for this Friday's Commitment of Traders Report---and because of the wild up/down price action during the reporting week, it will be impossible to tell whether all of yesterday's price/volume data will be in it.  As is most often the case, not all the data on a high-volume day like yesterday, gets reported in a timely manner.  I know that Ted Butler will have something to say about it in his mid-week commentary this afternoon EDT---and I'll be interested to see if he's prepared to put his marker down on this.

And as I send today's effort out the door at 5:15 a.m. EDT, I see that the dollar rally has rolled over---and the index is only up 18 basis points at the moment.  All four precious metals hit their current respective lows shortly before the London open.  Both gold and silver are back to about unchanged on the day---and platinum and palladium are up 4 and 9 dollars respectively.

Gold's net volume is a bit over 28,000 contracts---and silver's net volume is around 6,700 contracts.  Most of the volume is in their respective current front months, so it's mostly of the HFT variety.

I have no idea what to expect as the remainder of the Wednesday trading session unfolds, but as is almost always the case, what "da boyz" do during the COMEX trading session in New York is what matters.  And despite the fact that Jim Rickards said that the "price management scheme in gold and silver is now so obvious that JPMorgan et al should be embarrassed about it," they obviously aren't---and are still hard at it.

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

Ed Steer

Wed, 20 May 2015 04:16:00 +0000
<![CDATA[12.7 Million Ounces of Silver Withdrawn From SLV Since April 27. By Whom—and Why?]]> http://www.caseyresearch.com/gsd/edition/12.7-million-ounces-of-silver-withdrawn-from-slv-since-april-27.-by-whom-and-why/ http://www.caseyresearch.com/gsd/edition/12.7-million-ounces-of-silver-withdrawn-from-slv-since-april-27.-by-whom-and-why/#When:04:26:00Z "Silver 'analysts' of all stripes should be screaming about this from the rooftops"

¤ Yesterday In Gold & Silver

The gold price didn't do much in most of Far East trading on their Monday.  There was a bit of spike starting shortly before 2 p.m. Hong Kong time, but that was capped shortly before the London open---and it chopped lower for the remainder of the Monday session both in London and New York.

For the most part, the gold price traded within a ten dollar price range, so the highs and lows aren't worth my time to look up.

Gold finished the Monday session in New York at $1,225.80 spot, up $2.30 from Friday's close.  Net volume was 101,000 contracts, with over a third of that coming before the London open, as it took "da boyz" a fair amount of paper to keep prices in line in Far East trading.

It was more or less the same story in silver, although once it rallied, there didn't appear that any attempt was made to push prices lower in New York---and prices chopped sideways in a fairly broad range for the entire Monday session.

The low and high ticks were recorded by the CME Group as $17.475 and $17.775 in the July contracts.

Silver finished the day at $17.68 spot, up 18.5 cents from Friday.  Net volume was higher than I would like to see at 34,500 contracts.

Platinum chopped sideways until COMEX trading began---and then it tacked on 10 bucks by 11 a.m. EDT before trading sideways into the close.  Platinum finished the day $1,175 spot, up 9 dollars.

It was much the same for palladium, except its rally at the COMEX open didn't last long, hitting its low tick at 4 p.m. EDT in electronic trading in New York, closing at $785 spot, down 6 bucks from Friday.

The dollar index closed late on Friday afternoon in New York at 93.26---and began rallying almost the moment that trading began in New York on Sunday evening.  The index chopped higher, hitting its 94.27 high tick around 3 p.m. EDT.  It traded flat from there into the close.  The index finished the day at 94.16---up 90 basis points from Friday's close.

Here's the 6-month dollar index showing yesterday's gain in relation to the big sell-off that's been underway since mid March.  I would expect that a major counter-trend rally in the USD index would not help the precious metal prices, or their respective equities.  Although their performance in light of that rally was fairly impressive yesterday, but I doubt it will last.

The gold shares opened in positive territory, but traded with no enthusiasm.  The high tick came precisely at 11 a.m. EDT---and they chopped lower until around 2:45 p.m. before trading sideways into the close.  For the third day in a row the gold stocks finished down on the day, this time by 0.40 percent.

Once again the silver equities turned in a better performance than their golden brethren.  Their high came around 11:15 a.m. before they chopped lower until shortly after 3 p.m. EDT---and from there they rallied a hair into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 0.55 percent.

The CME Daily Delivery Report showed that zero gold and 124 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The surprise short/issuer was ABN Amro with 109 contracts, with Jefferies in very distant second place with 10 contracts.  Not surprisingly, JPMorgan was the biggest long/stopper with 67 contracts---33 for its client account---and 34 contracts for its own account.  HSBC USA stopped 34 contracts.  The link to yesterday's Issuers and Stoppers Report is here---and it's worth a quick look.

The CME Preliminary Report for the Monday trading session showed that for the second day in a row there was no change in gold's open interest, which still stands at 141 contracts left in the May delivery month.  Silver's May o.i. actually rose by 84 contracts---and now sits at 424 contracts, minus the 124 mentioned in the previous paragraph.

There was another big withdrawal from GLD yesterday.  This time an authorized participant removed 182,174 troy ounces.  Since May 1, there has been 755,776 troy ounces removed from GLD.   With the current gold rally about four days old, one would assume that gold should be pouring into GLD, but that's certainly not the case at the moment.  Ditto for silver.  And as of 6:40 p.m. EDT yesterday evening, there were no reported changes in SLV.

But when I checked back just before 2 a.m. EDT this morning, I saw that---surprise, surprise---there was another chunky withdrawal from SLV as well.  This time it was 1,194,813 troy ounces of the stuff.  That makes 5.1 million ounces withdrawn in the last three business days---and a stunning 12.7 million ounces since April 27.  By whom---and for what reason?

Why on God's green earth isn't anybody except Ted Butler and myself talking about this???  Gold and silver 'analysts' of all stripes should be screaming about this from the rooftops.  Please make sure you read Ted's quote in The Wrap section below that I stole from his Saturday's column.

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

There wasn't a lot of gold movement at the COMEX-approved depositories on Friday.  Only 4,500 troy ounces were reported received---and nothing was shipped out.

It was a pretty decent day in silver, as 300,442 troy ounces were shipped in---and 600,439 troy ounces were shipped out the door.  Most of the 'in' activity was at the CNT Depository---and the 'out' movement all came from Canada's Scotiabank.  The link to that action is here.

It was another busy day over a the gold kilobar COMEX-approved depositories in Hong Kong on their Friday---and both depositories were involved.  At Brink's, Inc. there were 7,110 kilobars received---and 4,278 were shipped out.  At the Malca-Amit Far East Ltd depository there were 630 kilobars received---and nothing shipped out.  The link to that activity in troy ounces is here.

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

¤ Critical Reads

UMich Consumer Sentiment Crashes as Surging Gas Prices Trump Stock Record Highs

Soaring gas prices dueled with soaring stock prices to leave University of Michigan Consumer Sentiment and it appears the former won. Printing at the weakest level since Oct 2014, UMich dropped to 88.6 (vs 95.9 expectations). This is the biggest miss on record.. and biggest MoM drop since Dec 2012. Both current conditions and expectations plunged despite surges in inflation expectations. Higher income expectations are starting to plunge - at their lowest in 7 months - and household finances are seen as the worst since July 2014. And finally, the survey's spokesperson says that respondents showed "concern over employment."

Gas prices are on the rise in Canada as well---and for what reason?  They started rising in this country long before the oil price began to rally off its low.  This 2-chart Zero Hedge piece showed up on their website last Friday morning---and it's something I found in yesterday's edition of the King Report.

Volumeless VIXtermination Fuels Stock-Buying Frenzy To Record Highs

This Zero Hedge piece from yesterday was posted on their website just after the closing bell.  It's loaded with charts---and it shows the madness out there at the moment.  The first two, plus the bunds chart, were the ones that really stood out for me.  As Chris Powell said: There are no markets anymore, only interventions.  I thank reader M.A. for this story.

Hedge Funds Close Doors, Facing Low Returns and Investor Scrutiny

For decades, nearly everything that the billionaire Julian Robertson touched turned to gold. Mr. Robertson, founder of the hedge fund Tiger Management, seeded a network of hugely successful “Tiger Cubs” — companies that in turn seeded more talent. It became the closest thing the hedge fund industry had to a dynasty.

Since the start of this year, however, the managers of three firms spun out of that gilded empire have called it quits after volatile performances and sometimes steep losses. They will return money to investors and focus on managing their own wealth.

TigerShark, Tiger Consumer and JAT Capital Management are just three examples among a recent wave of hedge funds that have closed their doors to investors in the face of choppy markets. They are a reminder that the hedge fund industry is not all spectacular returns.

This article appeared in The New York Times on Sunday---and I thank West Virginia reader Elliot Simon for sharing it with us.

Obama announces new police standards, bans military equipment for local police

President Barack Obama announced federal standards to improve trust between police and communities and a ban on some types of military equipment for local police agencies.

Obama spoke on the measures Monday in Camden, N.J., a city that has struggled with one of the country's highest violent crime rates.

A blueprint for improved community policing was announced that will help cities and towns "develop policing strategies that work best for building trust between law enforcement and the communities they serve while enhancing public safety," a statement released by the White House said.

This UPI story, filed from Washington, showed up on their website late yesterday afternoon EDT---and it's the first offering of the day from Elliot Simon.

Internet to Slip Out of U.S. Government Control by the End of 2015

Despite the wishes of a number of U.S. lawmakers, a plan is moving forward to transition control of the Internet away from the U.S. government and under the supervision of a global body. According to the web’s current key holder – and most of the world – that’s a good thing.

The web’s creation dates back to research commissioned by the U.S. government back in the 1960s. And besides, the government doesn’t own the Internet. No one does.

The U.S. oversees the Internet Corporation for Assigned Names and Numbers (ICANN). That nonprofit group is responsible for assigning Internet domain names and the corresponding numbers behind those addresses.

One year ago, the U.S. government announced plans to relinquish technical oversight by the Department of Commerce in favor of a "global multistakeholder community," like the United Nations.

On Thursday, the head of ICANN, Fadi Chehade, predicted that the privatization process would go through smoothly by year’s end, as all the necessary factors are nearly in place.

This interesting article was posted on the sputniknews.com Internet site very early Saturday morning Moscow time---and I thank South African reader B.V. for finding it for us.

Belligerent U.S. Refuses to Cede Control Over IMF in Snub to China

The Obama administration signaled it won’t jeopardize the U.S. power to veto IMF decisions to achieve its goal of giving China and other emerging markets more clout at the lender, according to people familiar with the matter.

That message was delivered at the International Monetary Fund’s spring meetings in Washington last month, the people said, where officials discussed how to overcome congressional opposition to a 2010 plan to overhaul the lender’s voting structure.

A solution backed by Brazil would have enabled an end-run around Congress -- while potentially sacrificing the veto the U.S. has held since World War II. With that option off the table, the people said, IMF member nations are considering a watered-down proposal that risks alienating China and India, which are already challenging the postwar economic order by setting up their own lending and development institutions…

This is another piece from the Zero Hedge Internet site.  It's their spin on an embedded Bloomberg story.  It was posted on their website at 2:15 p.m. EDT on Sunday---and it's worth reading.  It's another contribution from reader B.V.

Ratings agency Fitch to downgrade many European banks - newspaper

Ratings agency Fitch will soon downgrade European banks en masse, possibly even at the start of the week, German newspaper Handelsblatt said, citing unnamed financial sources.

In most cases the banks will be downgraded by between one and a maximum of four levels, according to an advance copy of an article due to be published on Monday.

Fitch was not immediately available to comment when contacted by Reuters. Handelsblatt said a spokesman did not want to comment on the report.

The move would be a reaction to European governments having become less willing to prop up banks if they get into a crisis, the newspaper said.

This short Reuters news item, filed from Berlin, put in an appearance on their website early Sunday afternoon EDT---and it's the second contribution of the day from Elliot Simon.  It's certainly worth skimming.

Juncker denies Greek rescue plan as negotiations reach 'final stages'

The president of the European Commission has reportedly intervened in Greece's bail-out negotiations, proposing a reduction in Troika-imposed budget targets and a release of emergency cash to prevent Greece going bankrupt in the summer.

According a blueprint leaked to Greek media, Jean-Claude Juncker's "plan" to break Greece's deadlock includes a relaxation of Athens' primary budget surplus target to 0.75pc this year - half that previously sought by Greece's paymasters.

The proposals also include releasing €5bn to the government in June, and delaying a number of fiscal austerity measures until October. However, the blueprint maintained that Greece would have to retain a controversial property tax and push for flexible labour market reforms.

Despite refusing to confirm the plan, a spokesman for Mr Juncker said the EU chief was now "personally involved" in Greece's talks.

This story showed up on The Telegraph's website at 6:30 p.m. BST yesterday evening, which was 1:30 p.m. EDT in Washington.   It's the second offering of the day from Roy Stephens. [Note: This story has been totally re-written since I posted it early yesterday evening---and I discovered the change when I was editing today's column at 4 a.m. EDT this morning.  It used to be headlined "Juncker steps in with emergency Greek rescue as negotiations reach 'final stages'"---and you'll note that the text has been changed from what's posted above as well. - Ed]

Europe should overcome U.S. pressure, resume cooperation with Russia - Duma chief

State Duma Speaker Sergey Naryshkin has urged European politicians to stop listening to U.S. propaganda and start working on common Eurasian economic interests with Russia.

Naryshkin expressed his views on the best possible course for European politics in an article entitled “Natural Allies”, published on Monday in the Russian government daily Rossiiskaya Gazeta.

He wrote that the foundations of the European Union or “Big Europe” had been laid by people who remembered the lessons of the First and Second World Wars and these people still assert NATO’s eastward expansion was a mistake. Europe is taking great risks if it remains in the political wake of a nation located thousands of miles from the European continent. The Ukrainian crisis is yet another confirmation of the fact that E.U. member countries must decide on their foreign policies without any foreign interference, he noted.

Another voice of reason and common sense, but the Americans aren't listening.  Let's hope the Europeans come to their senses.  This article showed up on the Russia Today website at 12:13 p.m. Moscow time on their Monday, which was 5:13 a.m. in New York.

'Macedonia unrest - another episode of West-Russia geopolitical battle'

The anti-governmental protests taking place in Macedonia is a sustained regime change attempt driven and financed by Western countries, Srdja Trifkovic, foreign affairs editor at Chronicles magazine, told RT.

RT: The protesters have vowed to stay on the streets until the government resigns. Will it go this far?

Srdja Trifkovic: It’s a classic regime change scenario as outlined by Gene Sharp many years ago. I don’t think that it will work this time round because first of all we are talking about thousands of protesters, not tens of thousands. In a country like the former Yugoslavian Republic of Macedonia with its 2 million people, tens of thousands might have provided the critical mass needed. I do not believe that Zoran Zaev, the socialist leader, has reason to believe that [Prime Minister] Nikola Gruevski will simply pack up and go. He knows that he is under attack both by the Western powers which have provided materials to be leaked to the opposition, and by the Albanian terrorists and he knows that his .. maneuvering space is extremely limited. So I don’t think that it will end in 24 or 48 hours with yet another president resigning.

This Russia Today article is a must read for all serious students of the New Great Game.  It was posted on their Internet site at 4:11 p.m. Moscow time on their Monday afternoon.  I thank Roy Stephens for bringing it to our attention.

‘Bigger role’ for U.S. in Minsk II accords: Are you sure, Ms. Nuland?

One year into the Ukrainian crisis, Washington reveals a desire to jump on the bandwagon of the Minsk peace accords – brokered by France and Germany. Not bad news, after all, but when it comes from Victoria Nuland...

News that US Secretary of State John Kerry flew to Sochi to meet with Russian Foreign Minister Lavrov and President Putin came as only a small surprise this week. In the wake of the most impressive Victory Day celebration ever across Russia, most experts agreed that the Russia people’s vigilance held a fairly massive sway over world public opinion afterwards. Western media was not oblivious to this either.

However much of a positive this trend may be, news that the Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland and sidekick Ambassador Geoffrey Pyatt are on the loose again tends to quell hopes of peace.

The U.S.---always sticking its nose in where it's neither wanted, needed---or appreciated.  This Op-Edge piece appeared on the Russia Today website very early Sunday morning Moscow time---and in my opinion it's certainly worth your while.  Once again I thank Roy Stephens for sending it our way.

Too early to speak of decisions on Ukraine after meeting with Nuland — Russia's deputy FM

It is too early to talk about any decisions on the Ukrainian conflict resolution after the Moscow meeting with US Assistant Secretary for European and Eurasian Affairs Victoria Nuland, Russian Deputy Foreign Minister Grigory Karasin told TASS on Monday.

"We have the Russian president's orders to establish bilateral contacts after the meeting with the [U.S.] state secretary [John Kerry] to discuss certain issues of the Ukrainian crisis resolution," Karasin said. "That's exactly what we are doing."

"We are trying to find those forms of cooperation that would, first of all, prevent a new round of the armed conflict in [Ukraine's] southeast and help launch a real dialogue between the Kiev government and representatives of the DPR and LPR [self-proclaimed Donetsk and Luhansk republics]," he said. "So far, this goal has not been achieved. Kiev is ignoring all the initiatives coming from Donetsk and Luhansk."

This news item, filed from Moscow, was posted on the tass.ru Internet site at 9:48 p.m. Moscow time on their Monday evening, which was 2:48 p.m. EDT in Washington.  Once again I thank Roy Stephens for sending it along in the wee hours of Tuesday morning.

Paul Krugman Drops Epic Truth Bomb on Latest Round of Lies About Iraq War

"Mistakes were made" just doesn't get at the truth about how America was coerced into the disastrous war in Iraq,and the horrific consequences that are still unfolding. Paul Krugman sets the record straight in Monday's column, beginning with the ironic statement, that "there’s something to be said for having the brother of a failed president make his own run for the White House."

The Iraq War was no innocent mistake based on faulty intelligence, Krugman argues compellingly. "America invaded Iraq because the Bush administration wanted a war," he writes. "The public justifications for the invasion were nothing but pretexts, and falsified pretexts at that. We were, in a fundamental sense, lied into war."

And we knew it—or certainly should have.

This should be no surprise to anyone.  It's just the same as the Lusitania, Pearl Harbor, Iran, 9/11, Bosnia, Libya, Syria, Ukraine---the list is nearly endless.  This absolute must read article appeared on the alternet.org Internet site yesterday sometime---and I thank Roy Stephens for sliding it into my in-box yesterday evening Denver time.

An Eye To Iran: European Businesses Prepare for Life After Sanctions

When Iran's oil minister receives visitors, he wears the usual insignias of the Iranian Revolution: an open shirt with a dark suit, five o'clock shadow and no tie. He holds Tasbih prayer beads in his left hand.

But Bijan Zanganeh is one of the Iranian pragmatists who would like to see a change in relations with the West. His schedule during a visit to Berlin the week before last was accordingly jam-packed with meetings.

He had breakfast with company representatives from Volkswagen and Linde, the world's largest gases and engineering company; held discussions with owners of small- and medium-sized businesses and also showed German Economics Minister Sigmar Gabriel the enormous possibilities that lie in the expansion of the Iranian energy sector.

The Tehran official found attentive listeners. Officials in Gabriel's ministry estimate that Iran has investment needs of around $100 billion per year. The country needs to update aging infrastructures, it needs modern automobiles, heavy machinery and pharmaceuticals -- all segments in which Germany is a global market leader.

This very interesting story was posted on the German website spiegel.de at 3:54 p.m. Europe time on Monday afternoon, which was 9:54 a.m. in Washington.  It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.

Stung by its neighbour's reaction, India plays it cool after 2nd quake hit Nepal

Stung by Nepal's reaction to India's over-generous assistance in the immediate aftermath of the April 25 earthquake, this time India is playing it slightly cool with its smaller, prickly neighbour.

On Wednesday, Prime Minister Narendra Modi spoke to his counterpart in Nepal Sushil Koirala, a conversation very different from the one that fateful Saturday​ two weeks ago​.

Yesterday's had the air of a ​caring but ​cool neighbour. "PM Sushil Koirala and I had a telephonic conversation. We reviewed the situation arising due to yesterday's tremors." said Modi in a tweet, before going on to promise assistance.

No good deed ever goes unpunished.  This interesting article, filed from New Delhi, put in an appearance on the Times of India website late Thursday morning IST [India Standard Time]---and I thank Kathmandu, Nepal reader Nitin Agrawal---who is still with us after the big quake---for passing it around on Saturday.

SGE Withdrawals vs. WGC Demand Q1 2015

SGE withdrawals from May 4 until May 8 (week 18) accounted for 37 metric tonnes. As a rule of thumb, this amount of gold is equal to Chinese wholesale gold demand – read this post for a comprehensive analysis of the mechanics of the Chinese gold market and all metrics used to measure demand. Year to date an incredible 858 tonnes has been withdrawn from SGE designated vaults, up 9 % y/y from 2013, up 19 % y/y from 2014.

Just three countries have exported 320 tonnes to China in three months. Chinese gold import added by mine supply (111 tonnes) and a little scrap easily exceeds 460 tonnes. So, 460 tonnes is the minimum of Q1 total supply for China, yet, demand as disclosed by the World Gold Council (WGC) was 273 tonnes; the mystery continues.

From what I’m seeing Chinese gold demand in Q1 was 500-600 tonnes, though the WGC wants us to believe it’s only slightly more than half of this (273 tonnes). The gap, as I’ve previously called it, has mushroomed to over 3,000 tonnes of gold in total since 2009!

This commentary by Koos appeared on the Singapore Internet site bullionstar.com on Saturday---and it's definitely worth reading.  I thank Dan Lazicki for pointing it out before Koos let me know.

'Central banks aren't trading the gold market the way they used to' -- Financial Times

A few years ago London's precious metals traders would arrive at their desks to find the phones flashing. On the other end of the line were rival banks looking to buy and sell gold. Today the trading floors are a lot quieter.

Not only is most trading screen-based but there has been a decline in bank-to-bank activity -- the anchor of the over-the-counter (OTC) billion market -- as many institutions have scaled back or exited commodities.

This has made the gold market more frenetic and pushed up the costs of hedging and doing larger trades, according to market participants.

"If you're just transacting in small sizes then probably you have benefited from the changes as you can transact directly through a bank's electronic platform," says one veteran trader.

"The issue is if you want to transact in a decent size, which used to be 100,000 to 200,000 ounces. That has become harder to get away with without influencing the price unduly."

I would guess that physical gold in size is a pretty scare commodity these days---and I would guess that silver would be the same.  And as Ted Butler pointed out, the COMEX futures market is very illiquid, as most of the trading is for price management purposes between the commercials and the Managed Money. This worthwhile read appeared on the Financial Times website on Monday---and it's posted in the clear in this GATA release.

Book review: 'The Floating Kilogram' -- the Federalist Papers for a gold standard

A recent article in The Week by progressive columnist Jeff Spross, "How Modern Capitalism Killed Self-Reliance," observed that "the gold standard is a niche enthusiasm rejected by most economists." Why that is so is curious. The hyperlink to his observation goes right to Episode 252 of NPR's "Planet Money," an interview with "charming curmudgeon" James Grant, which first aired in February 2011.

This is the same James Grant who furnished the foreword to Seth Lipsky's delightful new book "The Floating Kilogram ... and Other Editorials on Money from The New York Sun."

"The Floating Kilogram" was described by Steve Forbes: "This brilliant book is The Federalist Papers for a gold standard. It succeeds, dazzlingly -- and convincingly -- making the irrefutable case for re-linking the battered dollar to gold."

This very interesting book review/commentary showed up on the forbes.com Internet site yesterday morning EDT---and I found it on the gata.org Internet site.

Peru is another rich country insisting on being poor and pockmarked

National Public Radio broadcast and published a long report about the environmental devastation done by wildcat gold miners in Peru, a phenomenon common throughout the part of the developing world that has mineral resources:

What the NPR report missed is that this devastation is to a great extent the consequence of gold price suppression by Western central banks.

Yes, while the extractive industries are the prerequisites of modern civilization, they can damage the environment. Gold mining is only one of those industries. As with all extractive industries, the costs of environmental safeguards and remediation must be built into the price of their products.

When the gold price is suppressed by central banks, corporations -- which government easily can regulate and through which government enforces environmental safeguards and remediation -- won't mine as much of the metal and won't employ as many people. For amid price suppression, the metal can't be mined legally and responsibly; its price won't support responsible practices.

This story appeared on the npr.org Internet site very early Sunday morning EDT---and it's actual headline reads "Who Did This to Peru's Jungle?"  The one shown above is from Chris Powell---and it's a gold related story that was posted in a GATA release.

To central bankers, these deaths are just collateral damage of currency market rigging

Peter Kollie was digging for gold in the forests of southeastern Liberia when the deep shaft he had carved out of the earth collapsed, turning into a dark, airless tomb.

But that was a risk the 20-year-old, like thousands of desperate and impoverished young men working the illegal gold-mining camps of the border region by Ivory Coast, had been prepared to take.

"In such cases there is nothing we can do. We leave the body there and abandon the area for a while," Lomax Saydee, a fellow miner and youth welfare volunteer, told AFP a few days after Kollie's death. "After a certain period of time we go back and re-open the place and generally in that case you discover a huge quantity of gold in the area where the person died underground.

"So it is like you are digging your own grave sometimes, because if it closes on you no one can help you."

The actual headline to this AFP story reads "Buried Alive: Young Liberians Risk All in Deadly Mines".  It was picked up by the news.yahoo.com Internet site at early Sunday afternoon EDT---and it's another unhappy gold-related story that I found on the gata.org Internet site.

Open-Pit Gold Mine Collapse in Guyana Traps 10 Miners

An open-pit gold mine in remote southern Guyana has collapsed and buried up to 10 miners in debris.

Police spokesman Ivelaw Whittaker says authorities are digging through the mud in an attempt to rescue the men but it appears unlikely any survived. Seven miners were injured and treated at a hospital in the nearest town.

The collapse occurred Sunday in the densely forested Potaro-Siparuni region near the border with Brazil. The region has many informal, open-pit gold mines run by small operators.

Miners Association President Patrick Harding said recent heavy rains have made the work especially treacherous. He said his organization has been working to persuade operators to provide adequate support for the mud walls but said many disregard those precautions.

This AP story, filed from Georgetown, Guyana, was picked up ABC News on Monday---and it's another story that showed up in a GATA release.

Platinum supply still in deficit but not as large – WPIC

The latest Q1 analysis of global platinum supply and demand from the World Platinum Investment Council (WPIC) suggests a much lower supply deficit this year than the recent GFMS analysis but unlike the GFMS report, perhaps advisedly, makes no forecasts on what the effects on pricing might be as there are factors other than supply/demand fundamentals at play here.

Data for the WPIC survey is provided by commodities analysts from SFA (Oxford) and there certainly are some broad disparities from the GFMS Q1 report. GFMS puts the overall supply deficit this year as being in the order of 670,000 ounces, down from 1.016 million ounces in 2014. The WPIC report suggests a 190,000 ounce deficit this year, down from a 670,000 ounce deficit last – a considerable difference between the two analyses. GFMS also suggests the platinum market could move into surplus in 2016, and while the WPIC makes no such projections of the likely position a year hence, the implications of its latest analysis certainly suggests at least a more balanced supply/demand outlook ahead.

And, to his credit, Lawrie points out the obvious---"But platinum is also classified as a precious metal and as such the price may move broadly in tandem with gold despite it having no real monetary element in its demand. Further, its price fate is seen by many, like gold, as being in the hands of COMEX speculators rather than in terms of supply/demand fundamentals."

Amen to that!  Except the 'speculators'---according to the latest Bank Participation Report---are '3 or less' U.S. banks.  This commentary appeared on the mineweb.com Internet site at 2:05 p.m. BST in London on Monday.  It's definitely worth reading if you have the interest.

Perth Mint Gold Bullion sales up 13.5% Y/Y in April

Australia's Perth Mint has sold 26,545 ounces of gold coins and bars during April, advanced 13.5% from the sale of 23,461 ounces a year earlier, latest figures from the Perth Mint showed.

Although, sale of gold coins and bars down 22.5% as compared to the sale of 34,260 ounces a month earlier.

Perth Mint's sales of silver coins recorded at 472,273 ounces in April, tumbled 26% from the prior month’s total of 638,557 ounces but they marked a 30.5% increase from 361,988 ounces sold in April of last year.

Year-to-date, the Mint’s silver sales totalled 2,088,897 ounces, declined 5.6% as compared to 2,211,629 ounces in the corresponding period last year.

The above four paragraphs are all there is to this brief news item that appeared on the bullionstreet.com Internet site at 10 a.m. IST on their Saturday morning.  I found it on the Sharps Pixley website yesterday.

Why Most Gold Bugs Are Dead Wrong -- Jim Rickards

One of the most persistent story lines among gold bugs and market participants who foresee the collapse of the dollar goes something like this:

China and many emerging markets including the other BRICS are looking for a way out of the global fiat currency system.

That system is dominated today by the U.S. dollar. This dollar dominance allows the U.S. to force certain kinds of behavior in foreign policy and energy markets.

Countries that don’t comply with U.S. wishes find themselves frozen out of global payment systems and find their banks unable to transact in dollars for needed imports or to get paid for their exports. Russia, Iran, and Syria have all been subjected to this treatment recently.

China does not like this system any more than Russia or Iran but is unwilling to confront the U.S. head-on.

This must read essay put in an appearance on the bonnerandpartners.com Internet site on Saturday---and the first reader through the door with it was Harold Jacobsen.

¤ The Funnies

This past weekend was a long weekend here in Canada, so I was out and about with my camera.  This flowering bush was in someone's yard and since no one was around....  Both are cropped from the same photo, it's just that the second one is more heavily cropped to show the intricate detail of these tiny flowers at the macro level.  In real life, each flower you see here is a little smaller than a nickel.

¤ The Wrap

Once again, the standout physical development [last week] was what occurred in the big silver ETF, SLV. After a one million oz deposit to start the week, close to 4.5 million oz were withdrawn from the trust (on Thursday and Friday). Particularly in light of the very high trading volume, mostly on Wednesday but extended into Thursday, the two days in which silver prices advanced the most, the big withdrawals must be considered shocking. I’ve been using the word counterintuitive to describe the unusual metal withdrawals from SLV on price strength and deposits on price weakness for a number of years now, but once again, that description is inadequate. Interestingly, the shocking two day withdrawal in SLV connects many things I’ve discussed recently, including my speculation that JPMorgan has amassed a mountain of physical silver.

Because of the unique open-ended feature of SLV (and GLD), when there is net new investor buying in SLV that causes the price to rise, the prospectus dictates that actual new metal must be deposited that day to match the amount of new net investor buying of shares. (Short selling may frustrate and prevent the deposit of new metal, but wouldn’t result in a withdrawal of metal.) To keep it simple – net new investor buying in SLV causes the price to rise and requires the appropriate amount of new metal be deposited to back up the newly created shares. If there wasn’t net new investor buying to begin with, it is very unlikely that prices would have risen, particularly on a repeated basis (as has been the case in SLV for the past few years). Therefore, even though I am the only one raising this issue, any observer of the silver scene should be asking out loud – how the heck can there be a massive withdrawal of metal in SLV on a high volume price advance.

Who would undertake such an unusual trading approach of buying shares in SLV and immediately converting those shares into metal and why? The only explanation I can come up with is a large entity seeking to accumulate silver without the accumulation becoming widely known. If the newly purchased shares of SLV weren’t quickly converted into metal then it would quickly be revealed by SEC reporting requirements for acknowledging large share ownership (over 5%). Leave it in the form of accumulated shares and the buyer would soon need to reveal ownership; convert the accumulated shares to metal and no revelation is required.  I continue to believe that the large buyer of shares of SLV which is quickly converting those shares into metal is JPMorgan. - Silver analyst Ted Butler: 15 May 2015

Monday was a nothing sort of trading day.  It showed potential in the Far East, but as I mentioned at the top of this column, the volume before the London open was pretty heavy, so JPMorgan et al used whatever COMEX paper necessary to put out those particular fires---and that was more or less it for the remainder of the day, as volume was pretty light after that.

I was somewhat relieved to see that the precious metals didn't get smoked in the face of that big dollar rally yesterday, but that's just more proof that precious metal prices are totally controlled by what's going on in COMEX paper trading---and not in the real world.  If all markets were allowed to trade freely, then the movements in the currencies would make a difference.  Under current circumstances where "there are no markets anymore, or only interventions"---it matters not.

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

As I said in my Saturday column---and I saw nothing in yesterday's trading action to change my mind---it's my opinion that the current rallies in all four precious metals are done for the moment.  The only thing I don't know is how much backing and filling we'll be doing going forward, or how long "da boyz" might take to do it.

However, as I also pointed out on the weekend, we're nowhere near being overbought [except silver], but in a managed market such technical indicators are of dubious value, as these charts are all painted by JPMorgan et al---and they can [and do] paint whatever price charts they want.

And as I write this paragraph, the London open is about five minutes away.  Gold was under some selling pressure in Far East trading---and was down about six bucks at one point.  Not surprisingly, silver got it in the neck once again---and was down about 30 cents around 2:30 p.m. Hong Kong time on their Tuesday afternoon.  Platinum suffered the same fate---and palladium had a down/up move---and is back to almost unchanged.

Net gold volume is about 16,000 contracts, which is quite a bit for this time of day.  For a change, there's a decent amount of roll-over activity, but with only a week left to go before the big traders have to be out of the June contract on the COMEX, this should not be a surprise.  Silver's volume is getting up there at 7,000 contracts---and it's all of the HFT variety.

The dollar index has been chopping around all through Far East trading---and with London now open a couple of minutes, it's up 12 basis points.

Today, at the close of COMEX trading, is the cut-off for this Friday's Commitment of Traders Report and, unless there's been some jiggery-pokery going on under the surface that has been well hidden, I expect the report to be butt-ass ugly.  Of course today's price price/volume action should be included.  But as you already know, dear reader, not all of it may be reported in a timely manner---especially if it's a wild trading session.

And as I fire today's column off to Stowe, Vermont at 5:15 a.m. EDT, I see that the tiny dollar rally that began shortly before the London open has really caught fire---and is currently up 75 basis points---and appears to have leveled off [at least for the moment] just under the 95.00 mark.

In the face of that, all four precious metals got sold down some more.  At the moment, gold is down less than 3 bucks now---and well off its low.  Ditto for silver which is down 'only' 26 cents the ounce.  Platinum is lower by 10 bucks---and palladium by 2 dollars.

Gold's net volume is a bit over 30,000 contracts at this point---and silver's net volume is around 12,500 contracts.  No doubt the technical funds in the Managed Money category are pitching their newly-acquired long contracts from last week---and maybe going short a bit as well.  JPMorgan et al are, as always, on the other side of those trades.

As for the rest of the Tuesday session, I haven't the foggiest.  However, I'll be more than surprised if the bulk of the price/volume action doesn't occur during the COMEX trading session in New York.

That's all I have for today, which is more than enough---and nothing will surprise me when I check the charts later this morning.

See you tomorrow.

Ed Steer

Tue, 19 May 2015 04:26:00 +0000
<![CDATA[India’s Gold Imports Total 85 Tonnes in April]]> http://www.caseyresearch.com/gsd/edition/indias-gold-imports-total-85-tonnes-in-april/ http://www.caseyresearch.com/gsd/edition/indias-gold-imports-total-85-tonnes-in-april/#When:07:56:00Z "The charts below look toppy to me, as does the HUI"

¤ Yesterday In Gold & Silver

The gold price weakened a bit in Far East and early London trading on their Friday, with the low tick coming shortly after 11 a.m. BST.  It traded flat for a couple of hours---and began to rally shortly before the COMEX open.  And like what happened on Wednesday and Thursday, the price got stepped on shortly after the London p.m. gold fix.  The high tick of the day, such as it was, occurred minutes after the 1:30 p.m. EDT close---and the price didn't do much after that.

The low and high ticks were reported by the CME Group as $1,210.60 spot and $1,225.80 spot in the June contract.

Gold finished the Friday session at $1,223.50 spot, up $2.10 from Thursday's close.  Net volume was fairly decent at 117,000 contracts.

As is almost always the case, the silver price traded in lock step with gold, complete with the tap-down in price shortly after the London p.m. gold fix was in.

The low and high ticks were recorded as $17.205 and $17.585 in the July contract.

Silver closed yesterday at $17.495 spot, up a nickel on the day.  Net volume was very chunky at 45,500 contracts.

Ditto for platinum, which finished the Friday session at $1,166 spot, up 9 bucks from Thursday's close.  You'll note that the rally in that metal was stopped cold minutes after the London p.m. gold fix as well.

The palladium price didn't do a thing until 9 a.m. in New York---and then away it went to the upside.  The spike high at 1 p.m. EDT got hammered flat---and it traded sideways from there.  Palladium finished the day at $791 spot, up 11 dollars.

The dollar index closed very late on Thursday afternoon in New York at 93.39---and except for a 20 basis point up/down spike in the two hours proceeding the London open, it didn't do a thing in Far East trading on their Friday.  But the London trading session was another story.  It rallied from 93.39 up to its 94.00 high by 8 a.m. in New York---and hung in there for exactly one hour before heading lower.  Most of the decline was in minutes before London closed at 11 a.m. EDT---and it chopped slightly lower from there.  The 93.14 low tick came at 3 p.m. in New York.  The index finished down 13 basis points at 93.26---but had one hell of an intraday ride.

Of course the precious metals were trading [or were allowed to trade] like none of these currency machinations were going on at all.

Here's the 1-year dollar chart just so you can keep track of the longer term.

The gold stocks opened down, but quickly rallied into positive territory by the p.m. gold fix.  Their highs came at gold's high, which was moments after the 1:30 p.m. COMEX close---and from there they slid back into the red---as the HUI finished down 0.56 percent, its second losing session in a row.  I mentioned in yesterday's column that I was "underwhelmed" by Thursday's HUI action---and I was alarmed by yesterday's close.

The silver equities followed a similar price path, but didn't finish in negative territory after the COMEX close---and Nick Laird's Intraday Silver Sentiment Index closed up 0.11 percent, which was basically unchanged.

Nick mentioned that gold was up 3 percent on the week---and silver was up 6.7 percent.  The HUI closed up 3 percent as well---and the Intraday Silver Sentiment Index finished higher by only 8.8 percent.  So far this precious metal rally has not impressed me.

The CME Daily Delivery Report showed that zero gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  JPMorgan stopped one of them for its own in-house account.

The CME Preliminary Report for the Friday trading session showed that gold open interest in May was unchanged at 141 contracts---and silver's May o.i. fell by 4 contracts to 340.

There were no reported changes in GLD yesterday, but much to my amazement, another 1,624,968 troy ounces were withdrawn from SLV.  Ted Butler said that it's obvious what has been happening over the last few days as these big withdrawals continue---and that is a large entity with very deep pockets is buying SLV shares and redeeming them immediately for physical metal.  Ditto for gold so far this month as well.

Since April 27 there has been over 11.5 million troy ounces of silver withdrawn from SLV.

Yesterday [May 15] was the cut-off for the the mid-month short position report for the folks over at shortsqueeze.com and, without doubt, there will be big increases in the short position in both GLD and SLV, as no metal has been deposited all week---and after the rallies we've seen since Wednesday, both are owed decent amounts.  Unfortunately, we won't see that report for about ten days---but when the numbers are posted, I'll have them for you.

For the fourth day in a row there was no sales report from the U.S. Mint.  The one we get on Monday should be impressive, especially in silver eagles.

Month-to-date the mint has sold 8,000 troy ounces of gold eagles---3,500 one-ounce 24K gold buffaloes---and 1,058,500 silver eagles.  The silver/gold sales ratio based on these numbers works out to 92 to 1.

Thursday was another day where there was little in/out activity in gold and silver at the COMEX-approved depositories.  In gold, only 4,032 troy ounces were received---and 16 kilobars [514.400 troy ounces] were shipped out.  In silver, there was 7,971 troy ounces received---and 100,990 ounces shipped out the door.  Most of the 'out' activity was at Canada's Scotiabank.

It was quite a bit busier at the COMEX-approved gold kilobar warehouses in Hong Kong on their Thursday, as 6,816 kilobars were received---and 5,275 kilobars were shipped out.  The link to that activity in troy ounces is here.

As I mentioned in yesterday's column, Friday's Commitment of Traders Report for positions held as of the close of trading on Tuesday, was already "yesterday's news" before it was posted on the CFTC's website on Friday afternoon.

In a nutshell, the Commercial net short positions in both gold and silver increased by small amounts.  In silver it was 853 contracts, or 4.27 million troy ounces---and in gold it was 3,340 contracts, or 381,100 troy ounces of the stuff.

Under the hood in the Disaggregated COT Report, it was almost all the technical funds in the Managed Money category covering shorts and going long---and JPMorgan et al in the Commercial category doing the opposite.  Not a gold or silver producer, or end user of these products in sight.

Ted mentioned that the Big 4 traders in silver increased their net short position by 1,200 contracts, but he's rather reluctant to pin it all of JPMorgan at the moment---and will probably reserve judgement until next Friday's COT Report.

Of course, once the cut-off for Friday's COT Report was past on Tuesday, the price fireworks really started---and none of that big price action is in this latest report.  That will be hidden until next Friday's report.  And as I said yesterday---and many times over the past ten years---the fact that all this happened after Tuesday's cut-off was no accident.  It has occurred countless times in the past when "da boyz" want to hide what they're doing from the public's prying eyes for as long as possible.

Here's Nick's now-famous "Days of World Production to Cover COMEX Short Positions" for the Big 4 and Big 8 short holders for all physical commodities updated with yesterday's COT data.

Nick Laird was kind enough to send around the chart showing the withdrawals from the Shanghai Gold Exchange for the week ending May 7---and it showed that 37.093 tonnes were taken out during that reporting week.  In his covering e-mail Nick made mention of the fact that "The weekly average withdrawal since the start of 2013 is 43.405 tonnes."

I'm happy to report that I don't have all that many stories for you today---but I do have a decent number that I've been saving for today's column, so I hope you can find the time for them.

¤ Critical Reads

Someone is Lying: Job Optimism Plummets to Levels Unseen Since Financial Crisis

The percentage of respondents to University of Michigan's Consumer Sentiment Survey that "think they (or their spouse) will lose their job over the next 5 years" soared to its highest since March 2009.

Either the BLS' workers are lying, or the government's data on jobs is 'misleading'

This brief Zero Hedge article appeared on their Internet site at 10:21 a.m. EDT Friday morning---and the two embedded charts are worth a look.  I thank reader M.A. for today's first story.

U.S. Industrial Production Weakens For 5th Month - Longest Streak Since Great Recession

On the heels of the weakest print since May 2009 in March, April Industrial Production printed -0.3% (against expectations of a bounce to -0.03% from -0.64% - which was revised higher). This is the 5th monthly drop in a row - the longest streak since the Great Recession.

This is the 2nd weakest YoY print, at a mere +1.93%, since Feb 2010. To add to the pain, Capacity Utilization missed expectations falling to its lowest since Jan 2014 (falling the most YoY since Dec 2009) and Manufacturing production was unchanged.

This is another short piece from Zero Hedge yesterday morning EDT---and the three charts included are certainly worth a quick look as well.  I thank Dan Lazicki for this story.

Dear Bureau of Labor Statistics, About Those Plunging Gasoline Prices...

One of the major reasons for yesterday's market surge to new record highs was the surprise drop and miss in the April wholesale inflation report, or rather make that deflation, when the BLS announced that PPI in April had dropped by 0.4%, far below expectation of a 0.1% increase, of which the BLS said "over 30 percent can be attributed to the index for gasoline, which decreased 4.7 percent."

The implication, of course, being that with the U.S. drifting ever further from the Fed's desired 2% inflation threshold, not only is the probability of a June rate hike negligible, but the last time US macro data was this bad, the Fed launched QE2 (and Operation Twist... and QE3).

Which is all great, we just have one question for the BLS: just what "data" are you looking at?

Because a quick reality check reveals April gasoline prices not only did not drop 4.7%, they rose by 8%!

This is another short story from the Zero Hedge website.  This one was posted there at 4:12 p.m. EDT on Friday afternoon---and it's certainly worth reading.  It's the second offering of the day from Dan Lazicki.

5 banks expected to plead guilty to felony charges

For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.

But when five of the world's biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.

The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity.

Most if not all of the pleas are expected to come from the banks' holding companies, the people said -- a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.

This news item appeared on The New York Times website very early on Friday morning---and was then was picked up by the folks over at CNBC.  It's worth reading---and I thank Norman Willis for finding it for us.  There was another story about this.  It's a Reuters piece from Thursday morning headlined " SEC a stumbling block in banks' forex guilty pleas: sources"---and it's courtesy of West Virginia reader Elliot Simon.

Chinese Hackers Force Penn State to Unplug Engineering Computers

Penn State University, which develops sensitive technology for the U.S. Navy, disclosed Friday that Chinese hackers have been sifting through the computers of its engineering school for more than two years.

One of the country’s largest and most productive research universities, Penn State offers a potential treasure trove of technology that’s already being developed with partners for commercial applications. The breach suggests that foreign spies could be using universities as a backdoor to U.S. commercial and defense secrets.

The hackers are so deeply embedded that the engineering college’s computer network will be taken offline for several days while investigators work to eject the intruders.

This was an advanced attack against our College of Engineering by very sophisticated threat actors,” said Penn State President Eric Barron in a letter to professors and students. “This is an incredibly serious situation, and we are devoting all necessary resources to help the college recover as quickly as possible.

This Bloomberg article appeared on their website at 10 a.m. Friday morning Denver time---and it's the first contribution of the day from Roy Stephens.

U.S. Farmers In "Dire Straits": JPM Warns Of Imminent Liquidity Crunch

Despite the government's 'advice' to young debt-laden students, the tragedy of the American farmer continues with worryingly pessimistic views on the future of the industry. With farmland prices falling for the first time in almost 30 years, credit conditions are weakening dramatically and the Kansas City Fed warns that persistently low crop prices and high input costs reduced profit margins and increased concerns about future loan repayment capacity, and JPMorgan concludes, the industry is currently in dire straits with the potential for a liquidity crunch for farmers into 2016.

Not so long ago, U.S. farmland - whose prices were until recently rising exponentially - was considered by many to be the next asset bubble. Then, almost overnight, the fairytale ended, and as reported in February, U.S. farmland saw its first price drop since 1986.

I'm a farm boy from way back, so I this was a must read for me.  It's another Zero Hedge piece from 2:35 p.m. EDT yesterday---and it's another offering from Dan Lazicki.

The Triffin Dilemma

There is a fundamental incompatibility between the attainment of global economic stability and having a single national currency perform the role of the world’s reserve currency. This is hardly a new revelation. But events of the past few months have brought this topic back into the spotlight.

Belgian born American economist Robert Triffin first highlighted this incompatibility in the 1960s. He observed that having the U.S. dollar perform the role of the world’s reserve currency created fundamental conflicts of interest between domestic and international economic objectives.

On the one hand, the international economy needed dollars for liquidity purposes and to satisfy demand for reserve assets. But this forced, or at least made it easy, for the U.S. to run consistently large current account deficits.

Triffin argued that such persistent deficits would eventually put pressure on the dollar and lead to the demise of the Bretton Woods system of international exchange.

Jim Rickards has spent a lot of time talking about Triffin's Dilemma, but writer David Canavan takes the discussion far beyond that.  This essay, which is definitely worth reading, showed up on the dailyreckoning.com Internet site yesterday---and I thank Dan Lazicki for sharing it with us.

The secret corporate takeover hidden in the TPP -- Joseph E. Stiglitz

The United States and the world are engaged in a great debate about new trade agreements. Such pacts used to be called “free-trade agreements”; in fact, they were managed trade agreements, tailored to corporate interests, largely in the U.S. and the European Union. Today, such deals are more often referred to as “partnerships,” as in the Trans-Pacific Partnership (TPP).

But they are not partnerships of equals: the U.S. effectively dictates the terms. Fortunately, America’s “partners” are becoming increasingly resistant.

It is not hard to see why. These agreements go well beyond trade, governing investment and intellectual property as well, imposing fundamental changes to countries’ legal, judicial, and regulatory frameworks, without input or accountability through democratic institutions.

Perhaps the most invidious — and most dishonest — part of such agreements concerns investor protection.

When Joe Stiglitz dumps on something like this, you just know that the document is dangerous to all nations.  I've posted several stories about this in the last year or so, but this one by Joe falls into the must read category.  This short 2-page essay was posted on the marketwatch.com website on Thursday morning EDT---and it's the second offering of the day from reader Norman Willis.

Doug Noland: Today's New Paradigm

As an analyst of Bubbles, I’ve grown convinced of some things: First, it’s vital to recognize Bubble distortions early before they become deeply ingrained in markets and economic structures (when policymakers turn even more timid). Second, there is always an underlying source of Credit fueling the Bubble. Third, there are typically major distortions that mask the riskiness of the underlying Credit – government involvement is invariably a major factor along with heavy risk intermediation. Fourth, each Bubble has its own nuances that ensure it can go undetected for too long. Fifth, the longer a Bubble inflates the greater the scope of market misperception and structural impairment. And, finally, Bubbles burst when market misperceptions eventually succumb to reality, a development that tends to unfold in the Credit underpinning the boom.

I didn’t think it would come to this. When I began chronicling the “global government finance Bubble” more than six years ago, I saw a backdrop conducive for the biggest Bubble yet: desperate central bankers mindlessly determined to print Trillions, buy Trillions of securities and inflate market values tens of Trillions, while at the same time using zero rates to force savers into risky securities. Yet I never imagined we’d get to mid-2015, with a 5.4% unemployment rate, record stock prices, record M&A, booming corporate debt markets and abundant signs of froth (i.e. Palo Alto, upper-end real estate, Manhattan condos, art, etc.) – and rates would remain stuck at zero. I didn’t expect global bond and currency markets to prove so accommodating.

But here we are - at the precarious stage. I’ve posited that the more deeply systemic a Bubble the less conspicuous its effects. Yet this global Bubble has reached such extremes that obvious signs of excess have sprouted out everywhere – most conspicuously with European debt, M&A, Chinese equities, global sovereign bonds, biotech, etc. And with things turning more overt, there’s now some Wall Street research addressing the topic.

Doug Noland's Credit Bubble Bulletin is always a must read for me---and I thank reader U.D. for sending it my way before I had a chance to dig it up myself.

Alberta just put the fear into Canadian Prime Minister Stephen Harper

The Koch Brothers may need therapy. Tory blue Alberta has just dismissed a smug, incompetent, corporation-serving oligarchy from power and sent it to wander the wilderness. More than that — voters handed the reins of power to democratic socialists in a jurisdiction ruled and ransacked for decades by the surrogates of Big Oil.

Suddenly, anything is possible in Canadian politics. If Alberta can turn to the NDP, why not Canada? How long can it be before the Tea Party that Stephen Harper has made of federal politics for the past decade comes to an end — and the CPC shares the fate of Alberta’s Progressive Conservatives?

There’s a reason why the Tory federal caucus was like a “morgue” yesterday, to borrow Peter MacKay’s apt description. They know what few are saying out loud: If it happened to Jim Prentice, it could easily happen to Harper — and to every member of his team.

Both Harper and Prentice championed a sort of degraded democracy along the lines of the game plan set by the Trilateral Commission, a body set up in 1973 by establishment types worried about an “excess” of democracy creating a “governability” problem in the West. Those were the days of the energy crisis, the civil rights movement, the women’s movement, environmental protests and a peace movement that ended up forcing a halt to the Vietnam War. Today, those same forces are in play. Back then, the Commission concluded that people — particularly young people — had to be more passive and obedient to established authority if “democracy” was to survive.

This commentary from a week ago Thursday is an absolute must read for all Canadians---and it's worth reading even if you're not.  It appeared on the ipolitics.ca website.  Roy Stephens sent it to me last Saturday---and it obviously had to wait for today's column.

Oil Sands Land Becomes Alberta’s Hot Real Estate as Oil Rebounds

An indication that crude’s recent rally has further to run can be found in the northern forests of Alberta, where companies are paying the most in eight years to lease land for oil sands development.

Auctions attracted the highest prices since 2007 in the first four months of the year even as Canadian heavy oil slid below $30 a barrel, from $87.23 in June, and producers from Cenovus Energy Inc. to Royal Dutch Shell Plc slashed spending and jobs.

The trend is a sign that companies see the decline to a six-year low in March as temporary. Western Canadian Select crude has bounced back, gaining about 70 percent since March, almost twice as much as U.S. oil futures, amid rising demand for heavy oil from American refiners. Producers are more efficient than before the downturn after companies including Canadian Natural Resources Ltd. cut costs as much as 20 percent.

Well, dear reader, I heard on the radio yesterday afternoon that Calgary real estate sales were down 27 percent in the first quarter of 2015---and down 13 percent in Edmonton.  Based on that, I'm not sure what to make of this story.  It put in an appearance on the Bloomberg Internet site at 5 p.m. Thursday afternoon MDT---and it's another offering from Elliot Simon.

France offers Mistral contract termination, hopes to get off cheap

France has proposed to terminate the Mistral ships contract, offering €100mn less than Moscow paid upfront, not to mention other costs, and only after Russia allows selling the helicopter carriers to a third party, sources told Kommersant newspaper.

The sum which has been offered to Moscow, the paper has learned, is €784.6 million ($895 million), which is substantially less than €1.163 billion ($1.33 billion) Russia has reportedly spent on the military project – including the advance payment, training and new infrastructure.

France hopes to get off cheap paying back only the money specified in the work completion certificates, according to the source. Russia understandably disagrees with such an offer, insisting that all expenses and losses should be compensated for by the side which terminates the contract. Russia intends to recover the loses associated with training the 400-sailor crew and constructing docks for the vessels in addition to the €892.9 million ($1,017 million) advance payment.

This interesting news item was posted on the Russia Today website at 4:35 a.m. Moscow time on their Friday morning, was 9:35 p.m. EDT in Washington on Thursday evening.  I thank Roy Stephens for sending it our way.

As default looms, Greece seeks to escape key July payments to ECB

As the country lurches closer to default, Yannis Varoufakis, the country’s flamboyant and polarizing finance minister, broke one of the key taboos over its debt crisis Thursday, calling for the rescheduling of two big debt repayments in July.

On July 20, Greece has to redeem bonds worth €3.46 billion ($3.95 billion), currently held by the European Central Bank. Within a month of that, it faces another similar redemption of €3.19 billion.

Increasingly desperate ad hoc measures have allowed it so far to meet all its obligations to its creditors–the country had to raid the cash reserves of public-sector organizations and even its own IMF holding account to meet a €775 million payment to the Fund earlier this week.

But the July repayments are of a different order of magnitude.

This article showed up on the fortune.com Internet site very early on Thursday morning EDT---and I found it yesterday's edition of the King Report.

Serbia backs Russian gas pipeline interests

The Serbian foreign minister told his Russian counterpart Friday joining a gas pipeline project through Turkey was in his country's best interests.

"We want to participate in this [Turkish Stream] project," Serbian Foreign Minister Ivaca Dacic said from Moscow. "At present, we can express our readiness for participation in this project because we need reliable gas supplies."

The Kremlin said the Turkish gas project will help ensure European energy security. South Stream, a longer version of the pipeline, was envisioned as a European network before the Russian government pulled it off the table in late 2014.

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

German state TV not buying what Poroshenko is selling

"Don’t read Russian newspapers! Poroshenko loses his memory on German TV"

To all appearances, it has become a tradition for the leaders of the Ukrainian government to exhibit themselves as clowns in Europe. But German television has become their acme; once on it, they start bringing on the unprecedented nonsense.

First it was Yatsenyuk to sit in a puddle, reporting on channel one about "the USSR's invasion of Germany" and now Poroshenko, visiting Berlin May 13, has taken up the baton.

On that day the Ukrainian president gave an interview to the Central German Government television station ZDF. The video itself is on the internet at the channel’s website, under the pathetic title “Poroshenko: We will fight to the last drop of blood.

Poroshenko is finished---and he knows it.  This very interesting news item appeared on the fortruss.blogspot.co.uk Internet site on Thursday sometime---and it's certainly worth reading if you have the interest.  It's another story courtesy of Roy Stephens.

Is Washington Coming to Its Senses? — Paul Craig Roberts

There is much speculation about U.S. Secretary of State John Kerry’s rush visit to Russia in the wake of Russia’s successful Victory Day celebration on May 9. On May 11, Kerry, who was snubbing Russia on the 9th, was on his way to Russia, and Putin consented to see him on May 12.

As time passes we will find out why Kerry was snubbing Putin on May 9 and 3 days later was criticizing Washington’s puppet regime in Ukraine. For what is known at this time, a possible explanation is that Washington is coming to its senses.

If you watched the 1 hour 20 minute video of the Victory Day Parade, you are aware that the celebration sent a powerful message. Russia is a first class military power, and Russia is backed by China and India, whose soldiers marched with Russia’s in the parade.

The celebration in Moscow made it clear that Washington has failed miserably to isolate Russia. What Washington has done is to make the BRICS more unified.

This commentary by Paul was posted on his website yesterday---and certainly falls into the absolute must read category for any serious student of the New Great Game.  The first person through the door with this was reader M.A.

Batchelor and Cohen Podcast -- Kerry comes to Sochi

One of the most historically significant events to solve the Ukraine Crisis just happened in a meeting between Vladimir Putin, Russian Foreign Minister Lavrov and Secretary of State John Kerry in Sochi on May 12. The world may be a safer place because of it, and John Batchelor and Russian expert Stephen Cohen discuss what they think transpired. This broadcast is clearly the most detailed discussion I have found anywhere about what likely transpired at this meeting.

Cohen begins by describing the major players; the war faction in Washington and NATO see the Ukraine debacle as a Russian aggression and the German led "Normandy Format" sees the same event as a civil war - to be solved through negotiation. Both groups have been very vocal of late and Cohen mentions that Merkel travelled to Moscow on the 10th of May and talked to Putin. Clearly something was agreed upon there. And this set up a meeting two days later with John Kerry and Lavrov in Sochi.

Putin decided to attend. Again this implies communications of significance happened between the major players in advance of this meeting because suddenly Kerry is aligned with the Merkel group.  Cohen speculates that Merkel got a strong statement from the Russian leader that the Donbass rebels would negotiate with Kiev in good faith if Kiev came to the table with the same understanding. Kerry in Sochi was also in agreement and publicly stated that Kiev would be told to stop fighting. There was the game changer. No military solution. Kerry and presumably Obama are siding with Merkel to stop the fighting.

Cohen goes on the discuss the status of sanctions against Russia and the likelihood that they will be lifted, and speculates about Washington's position on the Crimea amalgamation (annexation according to Washington). He states that Kerry did not bring the Crimea discussion up. This is also significant, meaning Washington knows Crimea will remain Russian.

This 39:45 minute video interview was posted on the johnbatchelorshow.com Internet site  on Tuesday---and is definitely worth your while if you have the interest.  I thank Larry Galearis for bringing it to my attention---and now to yours.

America's Achilles' Heel

Last Saturday, a massive Victory Parade was held in Moscow commemorating the 70-year anniversary of the surrender of Nazi Germany to the Red Army and the erection of the Soviet flag atop the Reichstag in Berlin. There were a few unusual aspects to this parade, which I would like to point out, because they conflict with the western official propaganda narrative.

First, it wasn't just Russian troops that marched in the parade: the troops of 10 other nations took part in it, including the Chinese honor guard and a contingent of Grenadiers from India. Dignitaries from these nations were present in the stands, and the Chinese President Xi Jinping and his wife were seated next to President Vladimir Putin, who, in his speech at the start of the parade, warned against attempts to create a unipolar world—sharp words aimed squarely at the United States and its western allies. Second, a look at the military hardware that rolled through Red Square or flew over it would indicate that, short of an outright nuclear mutual self-annihilation, there isn't much that the U.S. military could throw at Russia that Russia couldn't neutralize.

It would appear that American attempts to isolate Russia have resulted in the exact opposite: if 10 nations, among them the world's largest economy, comprising some 3 billion people, are willing to set aside their differences and stand shoulder to shoulder with the Russians to counter American attempts at global dominance, then clearly the American plan isn't going to work at all.

This longish essay, which is certainly worth reading if you have the time and the interest, put in an appearance on the cluborlov.blogspot.ca website on Tuesday.   There's also link to an "Auf Deutch" version as well.  South African reader B.V. sent me this article on Wednesday---and for length and content reasons, had to wait for Saturday's column.

Why I Wept at the Russian Parade -- F. William Engdahl

Something extraordinary just took place in Russia and it may have moved our disturbed world one major step nearer to peace and away from a looming new world war. Of all unlikely things, what took place was a nationwide remembrance by Russians of the estimated 27 to perhaps 30 million Soviet citizens who never returned alive from World War II. Yet in what can only be described in a spiritual manner, the events of May 9, Victory Day over Nazism, that took place across all Russia, transcended the specific day of memory on the 70th anniversary of the end of World War II in 1945. It was possible to see a spirit emerge from the moving events unlike anything this author has ever witnessed in his life.

My tears at seeing the silent marchers and at seeing Putin amid them was an unconscious reaction to what, on reflection, I realized was my very personal sense of recognition how remote from anything comparable in my own country, the United States of America, such a memorial march in peace and serenity would be today. There were no “victory” marches after U.S. troops destroyed Iraq; no victory marches after Afghanistan; no victory marches after Libya. Americans today have nothing other than wars of death and destruction to commemorate and veterans coming home with traumas and radiation poisonings that are ignored by their own government.

It’s Zbigniew Brzezinski’s worst geopolitical nightmare come to fruition. And that, thanks to the stupid, short-sighted geopolitical strategy of Brzezinski and the Washington war faction that made it clear to Beijing and to Moscow their only hope for sovereign development and to be free of the dictates of a Washington-Wall Street Sole Superpower was to build an entire monetary and economic space independent of the dollar world.

This very moving essay appeared on the journal-neo.org Internet site on Wednesday---and it's another item that had to wait for today's column.  Once again I thank Roy Stephens for sharing it with us.  It's a must read as far as I'm concerned, but you're doing the final edit, so it's up to you.

U.S. wakes up to New (Silk) World Order -- Pepe Escobar

The real Masters of the Universe in the U.S. are no weathermen, but arguably they’re starting to feel which way the wind is blowing.

History may signal it all started with this week’s trip to Sochi, led by their paperboy, Secretary of State John Kerry, who met with Foreign Minister Lavrov and then with President Putin.

Arguably, a visual reminder clicked the bells for the real Masters of the Universe; the PLA marching in Red Square on Victory Day side by side with the Russian military. Even under the Stalin-Mao alliance Chinese troops did not march in Red Square.

As a screamer, that rivals the Russian S-500 missile systems. Adults in the Beltway may have done the math and concluded Moscow and Beijing may be on the verge of signing secret military protocols as in the Molotov-Ribbentrop pact. The new game of musical chairs is surely bound to leave Eurasian-obsessed Dr. Zbig “Grand Chessboard” Brzezinski apoplectic.

Here's Pepe doing the honours.  It's also definitely worth your while.  It showed up on the Asia Times website yesterday---and it's also courtesy of Roy Stephens.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott shares his views on the status of the economy, volatility in the bond markets, the launch of BitGold this week, Indian gold demand, and movement in the precious metals market.

This 10:31 minute audio interview with Eric, along with host Geoff Rutherford, was posted on the sprottmoney.com Internet site on Friday.

Digital currencies: A gold standard for bitcoin

Anthem Blanchard grew up with gold. His father was such a dedicated gold bug that he flew a biplane towing a 50-foot sign declaring "Legalize Gold!" at President Richard Nixon's second inauguration to promote the idea that ordinary Americans should be allowed to buy it.

The biplane was chased away by the US Secret Service, but James Blanchard III's wish ultimately came true: in December 1974 Americans were allowed to buy the metal after a 40-year moratorium.

The younger Mr Blanchard inherited his father's passion. After finishing his studies in the early 2000s he went to work for GoldMoney, one of the first online gold companies. And now he plans to take gold further into the digital era, launching a gold-backed digital currency that he calls the Hayek, after Friedrich Hayek, the Austrian economist and free-market hero. Hayek also happens to be Anthem Blanchard's middle name. His first name was inspired by a story by Ayn Rand, patron saint of libertarianism.

This interesting story appeared on the Financial Times website yesterday---and it's posted in the clear in this GATA release.

6 Months Later, Here's What's Happened to the Netherlands' Solar Bike Paths

A Dutch project to turn the nation's bike paths into energy-generating solar roadways has just cleared its first major test with flying colors.

Al Jazeera reports SolaRoad's 70-meter test track near the town of Krommenie outside Amsterdam has generated over 3,000 kilowatt-hours over its first six months of operation, or "enough to provide a single-person household with electricity for a year." That translates to 70 kwh per square meter of solar road per year, which the designers predicted as an "upper limit" during the planning process.

According to Al Jazeera, the roads are constructed of cheap, mass-produced solar panels that are protected with multiple layers of glass, silicon rubber and concrete before being covered with a coating that prevents slippage on the smooth upper surface. The current version can support vehicles of up to 12 metric tonnes (the average U.S. car is just under 2 tonnes), but is not yet ready for use with even heavier vehicles like buses and cargo trucks.

The ambitious project was constructed just a few months ago, with the first SolaRoad opening for traffic on Nov. 12, 2014. At the time, Mic's Sophie Kleeman noted the road "can't be angled toward the sun, so it receives roughly 30% less solar power than roof panels. It was also incredibly expensive — roughly $3.7 million, paid for largely by the local government."

This is very expensive electricity, dear reader, but it is an interesting story with lots of photos.  Roy Stephens sent it to me on Monday---and it had to wait for a spot in today's column.

India’s Gold Imports Total 85 Tonnes in April

India, the world’s second-largest gold consumer, imported 85 metric tonnes of gold in April, Revenue Secretary Shaktikanta Das said.

Shipments have totaled about 60 tonnes so far in May, Das said in an interview in New Delhi on Friday. Purchases jumped 78 percent in value terms to $3.13 billion in April from a year earlier, the Commerce Ministry said in an e-mailed statement on Friday. Imports in March more than doubled to 125 tonnes from a year earlier, according to the Finance Ministry.

India is set to become the world’s top consumer this year as economic growth accelerates and China’s booming equity markets reduce the appeal of bullion, according to P.R. Somasundaram, the World Gold Council’s managing director in India. A 42 percent rebound in crude oil prices from a six-year low in March and rising gold imports pose a threat to India’s current-account deficit as the country imports about 80 percent of its oil needs and almost all its bullion.

Crude is a more important component of our imports and its prices going up will be a greater worry than gold,” said Dharmakirti Joshi, chief economist at Crisil Ltd. in Mumbai. “I don’t think the government will take any new steps to control gold imports now.

This must read Bloomberg story has had a complete re-write since it was first posted on their website yesterday.  The original headline read "India's gold imports top 100 tonnes for second straight month," but it---and the text---have been changed to reflect the change in the import numbers.  I found the original story on the gata.org Internet site.

India gold demand likely to rise in Q2

Indian demand for gold is likely to increase in April-June from the first quarter due to strong buying during a major festival, lower prices and robust economic growth, the World Gold Council said on Thursday.

WGC’s second-quarter gold demand numbers for India, expected to be released by mid-August, will likely show an improvement over the first quarter, when China was the top consumer for gold, overtaking India by nearly 100 tonnes.

“Every quarter is going to be higher than the previous ones this year because GDP growth is expected to be higher and gold prices have come down,” said Somasundaram PR, managing director of WGC’s India operations.

Second quarter buying will be boosted by the festival of Akshaya Tritiya, considered one of the most auspicious days to buy gold in India.

Of course all this demand won't make any difference to the price, as JPMorgan et al are still sitting on it in the COMEX futures market---and as I keep saying, until that changes, nothing changes.  This gold related story first appeared appeared on the Reuters website, but was picked up by the mineweb.com Internet site at 3:55 p.m. London time yesterday afternoon, which was 10:55 a.m. in New York.  It's definitely worth reading.

¤ The Funnies

The photo below if of a gentleman that you won't recognize, but some will certainly know the name.  The only reason I'm posting this is because it goes with a cartoon further down.  I took this photo at a book-signing here in Edmonton two weeks ago---and the man's name is W.P. Kinsella.  He's an Alberta author whose most well-know work is titled "Shoeless Joe"---and the movie that sprang from that book is "Field of Dreams" starring Kevin Costner and Amy Madigan.  The screen play was written by the director, Phil Alden Robinson.  It's a classic---and one of my favourite movies of all time.  Here's what Keith Olbermann had to say about it.

¤ The Wrap

Every week I usually report that the interplay between the managed money traders and the commercials makes up the bulk, if not all of the net change in positioning. Almost always, when the managed money traders buy, prices have advanced during the reporting week and fall when these traders are net sellers. Some might say this is coincidental to price movements, just like some used to say the sun orbits the earth. The fact is that managed money buying causes prices to rise and managed money selling causes prices to fall. Leaving aside that the commercials control short term prices moves through HFT and spoofing and therefore control managed money buying and selling, it is wrong that managed money speculators are causing prices to move. In fact, it’s more than wrong; it’s illegal according to commodity and interstate commerce law.

On this specific issue, the three main culprits behind the silver manipulation, JPMorgan, the CME and the CFTC are silent.  There’s a good reason for their silence – there is no legitimate explanation that can refute that the main, if not sole influence on silver pricing is COMEX positioning between managed money traders and the bookmakers we call commercials. - Silver analyst Ted Butler: 13 May 2015

Yesterday brought the sad new of the passing of guitar and blues legend B.B. King---and many thoughtful readers sent stories and musical suggestions to honour him.  I'm happy to do so.  The first is linked here---and the second one is here.

Last week's classical "blast from the past" was Antonín Dvořák's "Serenade for Winds"---and this week I thought I'd post his equally famous "Serenade for Strings in  E major Op. 22".  He composed the entire work in just two weeks in May of 1875---so the work is exactly 140 years old this month.  Happy anniversary!  The link is here.

Excuse me for thinking this, but the price action of the last couple of days has all the hallmarks of a top [hopefully temporary] in these rallies.  In addition to the cooling off in the precious metal prices themselves, their associated equities have not exactly been roaring to the upside.  The charts below look toppy to me, as does the HUI.

Not that I want to hedge my comments above, but the RSI traces in these metals [or the stocks] certainly hasn't reached the overbought stage by any stretch of the imagination---and there's no reason that they couldn't continue to rally for a while longer.

But unless JPMorgan et al have changed their spots since trading began on Wednesday, these rallies look almost done to me, as the deterioration in he COMEX short positions in both gold and silver has most likely been massive.

I'm being coy about all this because of something that Ted Butler and I have discussed on numerous occasions over the last decade or so---and that's how JPMorgan might slide out from underneath their silver short position in the COMEX futures market and leave the rest of the shorts  [mostly Canada's Scotiabank] to burn in hell as the prices blew sky high.  That could only occur if JPMorgan could arrange [privately/quietly?] with the raptors [the Commercial traders other than the Big 8] who are long the COMEX silver market, to sell their long positions to JPM on the sly.

Could they do it? Beats the hell out of me.  But if the attempt were going to be made, a rally such as we've had since the COT cut-off on Tuesday would be the perfect cover.  Both Ted and I were hoping that JPMorgan would have tried sooner, but they obviously haven't.

Have they done it now?  I don't know, but the possibility, however small, does exist.  I wouldn't bet any money it, but its something that Ted has spoken about before in past commentaries---and I'm mentioning it here again today.

I have no reason to doubt Ted's supposition that JPMorgan [and maybe others] have amassed 350+ million troy ounces of physical silver over that past four years.  And I'm still looking for any explanation as to why a very deep-pocketed buyer would be buying truckloads of SLV and GLD shares in the last week or so---and redeeming them for metal.  In the case of silver, that's 11.5 million troy ounces in less than 3 weeks---and almost 600,000 ounces of gold since the first of May.

Then there's the matter of all the silver deliveries that JPMorgan has taken for its in-house [proprietary] trading account since the beginning of March.

Something stinks to high heaven here---and one wonders how long this will last before there's some sort of resolution.  It's coming at some point, but nobody knows how big and bad it's going to be when it does arrive.

I look forward to next week's trading action with great interest---starting with the Sunday evening open in New York.

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

See on Tuesday.

Ed Steer

Sat, 16 May 2015 07:56:00 +0000
<![CDATA[Ray Dalio: “If You Don’t Own Gold, You Know Neither History Nor Economics”]]> http://www.caseyresearch.com/gsd/edition/ray-dalio-if-you-dont-own-gold-you-know-neither-history-nor-economics/ http://www.caseyresearch.com/gsd/edition/ray-dalio-if-you-dont-own-gold-you-know-neither-history-nor-economics/#When:04:13:00Z "Yesterday's volume numbers were, for the second day in a row, not what I wanted to see"

¤ Yesterday In Gold & Silver

The gold price traded almost ruler flat through most of Far East trading on their Thursday, but began to show signs of life about 1:45 p.m. Hong Kong time.  That 'rally' lasted until ten minutes after the COMEX open---and then gold rallied sharply before getting cut off at the knees around 10:30 a.m. in New York.  It crawled higher from there, but got sold down once COMEX trading was done for the day---and the electronic session yesterday looked like a duplicate of the electronic trading session on Wednesday.

The low and high ticks were recorded by the CME Group as $1,211.90 and $1,227.70 in the June contract.

Gold finished the Thursday session in New York at $1,221.40 spot, up $6.30 from Wednesday's close.  Net volume was very chunky at 159,000 contracts.

With some minor variations, the silver price action was similar to gold's, so I shall spare you the play-by-play.

The low and high ticks were reported as $17.07 and $17.585 in the July contract.

Silver closed yesterday at $17.445 spot, up another 33.5 cents.  Net volume was an eye-watering 60,000 contracts.

As has been the case lately, the platinum price mirrored gold and silver prices closely once again.  That white metal finished the Thursday session at $1,157 spot, up 10 bucks on the day.

After chopping mostly sideways in Far East and Zurich trading yesterday, the palladium price got sold down during the exact same time-frame that the other three precious metals were rallying.  Palladium's low tick came at the the other precious metal's high ticks.  It rallied a bit after that, but still closed down 4 dollars at $780 spot.

The dollar index closed late on Wednesday afternoon in New York at 93.62---and then chopped quietly lower to its 93.15 low tick, which came minutes before lunch in London.  The subsequent rally lasted until shortly before 11:30 a.m. in New York.  It then slid quietly lower until the equity market closed---and it traded flat from there.  The index closed at 93.39---down another 23 basis points.

The gold stocks gapped up a bit the open---and hit their highs at gold's 10:30 a.m. EDT high tick---and then sold down into negative territory by 2:30 p.m. before chopping quietly sideways into the close of the equity markets in New York.  The HUI finished down 0.28 percent.  I was underwhelmed---and hoping its not a harbinger of things to come.

The silver equities fared far better, as their initial rally was much stronger---and the high in that precious metal came at 10 a.m. EDT.  Although they chopped lower from there, they rallied a bit during the last ninety minutes of trading, as Nick Laird's Intraday Silver Sentiment Index closed up 1.28 percent.

The CME Daily Delivery Report showed that zero gold and 14 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  JPMorgan stopped 3 of them for clients and 6 of them for its company 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 fell by 4 contracts, leaving 141 left open---and silver's o.i. declined by 31 contracts, leaving 344 left---minus the 14 mentioned in the prior paragraph.

I was gobsmacked by the changes in both GLD and SLV yesterday, as both showed major withdrawals.  In GLD, an authorized participant took out 141,895 troy ounces---but in SLV there was another over-the-moon withdrawal, as 2,867,610 troy ounces was taken out by an authorized participant.

Just as a matter of interest, in GLD since May 2, there have been three withdrawals [no deposits] totalling 573,542 troy ounces.  In SLV since April 27 there have been five withdrawals and only 1 deposit.  During that period the amount of silver in SLV has declined by 9.9 million ounces.  No price action during these times periods warranted these kind of withdrawals of physical metal.

With a 3-day rally in both gold and silver under out belts, it will be interesting to see how much of these two metals will be deposited in the next few days, as it's a good bet that both ETFs are owed a decent amounts of both.  And as I said yesterday, it remains to be seen if these authorized participants resort to shorting the shares in lieu of depositing real metal.  I'll have more on this in tomorrow's column.

Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the goings-on over at the iShares.com Internet site as of the close of business on Wednesday---and here is his report.

"Analysis of the 13 May 2015 bar list, and comparison to the previous week's list: 3,823,878.2 troy ounces were removed (all from Brinks London), no bars were added or had serial number changes."

"The bars removed were from: Degussa (0.7M oz), Handy Harman (0.6M oz), Krasnoyarsk (0.5M oz), Britannia (0.4M oz) and 25 others.  As of the time that the bar list was produced, it was overallocated 16.0 oz."

"All daily changes are reflected on the bar list, except a 955,880 oz deposit Wednesday."

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

There wasn't a lot of in/out activity at the COMEX-approved depositories on Wednesday.  In gold, there was no in/out movement at all---and in silver, nothing was received---and only 107,072 troy ounces were shipped out.  All of it came out of Canada's Scotiabank.

It was reasonably quiet over at the COMEX-approved gold kilobar depositories in Hong Kong, as only 88 kilobars were reported received---and 994 were shipped out.  The link to that activity in troy ounces is here.

I have the usual number of stories for a week-day column---and I'll happily leave the final edit up to you.

¤ Critical Reads

Wholesale Deflation Strikes U.S. Economy: April PPI Has Biggest Annual Drop In 5 Years

Something funny happened on the way to the global reflation (telegraphed so loudly by the recent surge in 10Y yields to the highest level of 2015): PPI just crumbled by a sequential 0.4% in the month of April, despite expectations it would rise by 0.1% and continue the 0.2% monthly increase seen in March.   This was a -1.3% drop in PPI - the fastest fall in 5 years.

Worse, the annual decline in final demand goods was -5.2% Y/Y, the biggest drop in the revised series in record!

And so as wholesale deflation rages, and countless other charts are screaming recession, we can't wait for the Fed to hike rates just so it can push the US back into recession and have the alibi to unleash QE4.

This chart-filled commentary appeared on the Zero Hedge website at 8:46 a.m. EDT yesterday morning---and today's first story is courtesy of Dan Lazicki.

Bloomberg's Consumer Comfort Tumbles For Longest Streak in 18 Months

Confirming Gallup's demise of the confidence of the consumer, Bloomberg's non-government-sanctioned Consumer Comfort index has now fallen for the 5th straight week - the longest streak of uncomfortableness since Nov 2013. The index is barely above unchanged for 2015 with people in The South and North East feeling the misery the most in the last week.

This 1-chart story showed up on the Zero Hedge website at 10:03 a.m. EDT on Thursday morning---and it's the second offering in a row from Dan Lazicki.  The chart is worth a quick look.

HSBC warns: The world economy faces a 'titanic problem'

HSBC chief economist Stephen King is already thinking about the next recession.

In a note to clients Wednesday, he warns: "The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers."

Here's King (emphasis added):  Whereas previous recoveries have enabled monetary and fiscal policymakers to replenish their ammunition, this recovery — both in the US and elsewhere — has been distinguished by a persistent munitions shortage. This is a major problem. In all recessions since the 1970s, the U.S. Fed funds rate has fallen by a minimum of 5 percentage points. That kind of traditional stimulus is now completely ruled out.

"Next" recession?  We haven't dug ourselves out of the last one yet.  This short commentary appeared on the businessinsider.com Internet site at 8 a.m. on Wednesday morning EDT---and I thank Norman Willis for finding it for us.  The full Bloomberg article containing Stephen King's comments is headlined "HSBC: Central Banks Are Running Low on Ammunition".  I found this piece in yesterday's edition of the King Report.

This is What $800 Million in Ten Pieces of Art Looks Like

On Monday, Picasso’s Women of Algiers (Version O), set an auction house record when it sold for $179,365,000, including the house's premium, prompting us to remark that if you were looking for signs of runaway inflation, Christie’s may be a good place to start. 

The nearly $200 million price tag for the “riot of colors focused on scantily dressed women” is, according to WSJ, reflective of the work’s “trophy” status which it earned as a result of its “ownership pedigree”. Translated from high-end art world parlance to plain English: for billionaires who have seen their obscene fortunes balloon under monetary policies designed to inflate financial assets at the expense of everything else (including market stability), purchasing art affords the buyer an even greater opportunity to “boast” than hoarding $100 million homes because after all, there a lot of mega mansions, but there’s only one vibrant, multi-hued Picasso riff on a Delacroix, so really, $180 million is a bargain, especially when most of the purchase price will be recouped by S&P 2,500, or SHCOMP 6,000 (depending on the nationality of the unnamed buyer).

This trend isn’t likely to change anytime soon, and as Bloomberg reports, more than $2 billion in art has been sold at Christie’s and Sotheby’s in the last week alone with the top 10 pieces accounting for an astounding $800 million.

Bloomberg sums it up nicely: "You know the market is frothy when a Monet that sells for $40.5 million doesn’t make the final cut for a top 10 list."

Wow!  This is a must read, just so you can see what people paid these grotesque sums for.  It makes you want to shut the door on your Hobbit hole and never come out.  It's certainly keeping the super rich out of the gold market.  This is another Zero Hedge piece from yesterday---and I thank reader M.A. for sending it our way.

McCain rejects Pentagon push for more Russian rocket engines

U.S. Senate Armed Services Committee Chairman John McCain on Wednesday rejected a request by U.S. officials for changes in federal law to let the two largest U.S. arms makers use more Russian rocket engines to compete for military satellite launches against privately held SpaceX.

McCain’s comments reflect frustration among some lawmakers about the Pentagon’s failure to halt purchases of the RD-180 Russian engines after Russia’s annexation of Crimea.

As SpaceX becomes a potential competitor to current monopoly launch provider, United Launch Alliance, a joint venture of Lockheed Martin Corp and Boeing Co, billions of dollars of orders are at stake and both sides are lobbying lawmakers hard.

This Reuters article, filed from Washington, put in an appearance on their Internet site late Wednesday afternoon EDT---and I thank South African reader B.V. for sharing it with us.

Prince Charles's 'black spider memos' show lobbying at highest political level

A cache of secret memos between Prince Charles and senior government ministers has been released after a 10-year legal battle, offering the clearest picture yet of the breadth and depth of the heir to the throne’s lobbying at the highest level of politics.

The 27 memos, sent in 2004 and 2005 and released only after the Guardian won its long freedom of information fight with the government, show the Prince of Wales making direct and persistent policy demands to the then prime minister Tony Blair and several key figures in his Labour government.

From Blair, Charles demanded everything from urgent action to improve equipment for troops fighting in Iraq to the availability of alternative herbal medicines in the U.K., a pet cause of the prince.

I posted the abridged version of this story that appeared on the sputniknews.com Internet site in yesterday's column.  But here' the "Full Meal Deal" courtesy of The Guardian from a longish article they posted on Wednesday evening BST.  It's the second contribution of the day from Elliot Simon.

Poles Feel Betrayed Over Illegal CIA Torture at Remote Black Site

"This left bad feelings on our side. We are a small country that was badly treated by a great power", according to Tadeusz Chabiera, founder of the Euro-Atlantic Association think tank in Warsaw Poland.

The "bad feelings" for a small country relate to revelations that a small secret rural prison in Stare Kiejkuty in north east Poland was used by American CIA agents to interrogate and illegally torture terror suspects. One of whom was Khalid Shaikh Mohammed, the man behind the 9/11 terror attacks.

The intelligence training base in Stare Kiejkuty became a prison known as a 'black site' for CIA agents to conduct 'enhanced interrogation techniques' — basically torture methods — that were against the law in the United States.

This news item appeared on the sputniknews.com website at 6:04 p.m. Moscow time on their Thursday afternoon, which was 11:04 a.m. EDT in Washington.  It's the first offering of the day from Roy Stephens.

Poroshenko Snubs Minsk Accords, Vows to Fight 'Till Last Drop of Blood'

Ukrainian President Petro Poroshenko has accused Russia of increasing its military presence in his country, something Moscow firmly denies, and said that Ukraine would fight “Russian aggression” “until the last drop of blood."

In an interview with German broadcaster ZDF, Ukrainian President Petro Poroshenko said Russia has deployed 11,000 troops in the war-torn Eastern Ukraine, adding that they can fuel separatists in the region and make them create a land bridge to the Crimean peninsula.

This claim sparked harsh reaction from Moscow, with Kremlin spokesman Dmitry Peskov saying Thursday that: "such baseless, vague and ungrounded accusations will never produce a positive result, to put it mildly."

Poroshenko also criticized the Minsk agreement and called it a "pseudo-peace", which does not guarantee any security for his country. At the same time, his French and German counterparts consider its implementation a key aspect for maintaining security in Europe and the best option for overcoming the current crisis.

After the Kerry/Lavrov/Putin talks in Sochi early this week, Poroshenko's words ring hollow.  This is another offering from the sputniknews.com Internet site yesterday afternoon Moscow time---and it's also courtesy of Roy Stephens.

Alasdair Macleod: The trouble with cash

When interest rates are zero and it costs a bank to look after your money it becomes an unattractive asset. Banks in some jurisdictions (such as Switzerland, Denmark and Sweden) are even charging customers interest on cash and deposits. And if you go to your bank and withdraw large amounts in the form of folding notes to avoid these charges you will be lucky if you are not treated as a sort of pariah. For the moment, at least, these problems do not extend to sound money, in other words gold.

There is an obvious alternative to cash, and that is to buy physical gold. This does not constitute a run on the banking system, because a buyer of gold uses electronic money that transfers to the seller. The problem with physical gold is a separate issue: it challenges the raison d'être of the banking system and of government currencies as well.

This is why we can still buy gold instead of encashing our deposits, for the moment at least. It can only be a matter of time before people realise that with the cash option closing this is the only way to escape an increasingly dysfunctional financial system.

This short commentary by Alasdair showed up on the goldmoney.com Internet site yesterday sometime---and I found it embedded in a GATA release.

Gold Breaks Key Technical to 3-Month High, Silver Surging

The last 3 days have seen precious metals surging. Silver is up over 7% - its biggest such rise since Aug 2013, and Gold up 3% - its largest in 4 months. Volume is heavy also. A specific catalyst is unclear but USD weakness is being cited, weak macro data suggesting further easing, China demand ahead of SDR-backing, and finally the realization that the Chinese shift to unconventional monetary policy (LTROs) is a slippery slope to full-blown QE from which few (if any) have ever escaped.

  • Gold broke above its 200DMA at $1209.60
  • Silver broke above its 200DMA at $17.23

It's way too early to break out the party favours just yet, dear reader---but the party has already started over at Zero Hedge.  Read with caution.  It was posted on their Internet site yesterday morning EDT---and I thank Dan Lazicki for sending it along.

The Next Gold Bull Market Starts Before October -- Jeff Clark, Casey Research

I’m going out on a limb: I think the next bull phase in the gold market gets underway before October.



But not due to runaway demand…

At an International Monetary Fund (IMF) forum last month, China’s central bank governor, Zhou Xiaochuan, made it clear he believes the renminbi is “ready for reserve status.” It would be a huge step for the Chinese currency, starting with the fact that it would be added to the basket of currencies IMF member countries can include in their official reserves. Billions would be invested in it.

Once again it depends on what JPMorgan et al do, or are instructed to do.  But, here's hoping the Jeff is right! This commentary  showed up on the Casey Research website yesterday---and it's worth reading.

Ronan Manly: Venezuela's gold repatriation had banks scrambling

In the concluding part of his study of Venezuela's gold repatriation, gold researcher and GATA consultant Ronan Manly writes that the country's gold seems to have been put in play by bullion banks throughout Europe and that a repatriation shipment probably came from the Banque de France though Venezuela had not deposited any gold there. That is, the repatriation required some scrambling on the part of bullion banks, central banks, and the Bank for International Settlements.

But now, Manly notes, as Venezuela's socialist regime continues to push the country toward bankruptcy, the regime is pawning its gold again and actually seems to have a close relationship with certain bullion banks.

Manly concludes: "Gold leaving Venezuela on a flight back to London, New York, or elsewhere will not get the fanfare and celebration that accompanied the same gold's arrival into Caracas a short few years ago."

Manly's study is headlined "Venezuela's Gold Reserves -- Part 2: From Repatriation to Reactivation" and it was posted on the bullionstar.com Internet site in Singapore yesterday.  I thank Dan Lazicki for sending it our way---and I thank Chris Powell for wordsmithing "all of the above".  Like Part One that was posted in yesterday's column, it's on the longish side, but it's a very interesting read.

ScotiaMocatta: Gold ‘cheap’ safe haven

In a recent roundup on the outlook for gold, ScotiaMocatta says a strong upside surprise may be in store for the price of gold.

ScotiaMocatta analysts take the position that investors, presently bored with gold, will show it some favour as other holdings and asset classes turn south.

“We are still of the view that the most bullish aspect of the gold market is that other assets are already expensive – notably the dollar, treasuries and equities,” ScotiaMocatta says.

It continues, “When these correct, as indeed may be starting to happen, then investors may look for a cheap safe – haven and gold looks well placed to fill that role. With the financial system still suffering many stresses including uncertainty over Greece, competitive currency devaluation and unmanageable amounts of government debt, we feel investment demand for gold could pick up at relatively short notice.”

Since Scotiabank is one of the biggest short holders in the COMEX futures market in gold---and the biggest COMEX short in silver, they should be careful what they wish for, although this 'analyst' may not know that.

This gold-related story showed up on the mineweb.com Internet site at 11:00 a.m. BST yesterday morning, which was 6:00 a.m. in New York EDT.  I thank Roy Stephens for sending it our way.

Germans pile into gold amid Greek eurozone default fears

German investors have piled into gold bars and coins in the first quarter of the year as a hedge against European Central Bank policy and the threat of a Greek default bringing down the eurozone.

Latest figures from the World Gold Council show that Germans increased their buying of gold coins and bars of bullion by 20pc to 32.2 tonnes in the last quarter, the highest rate of purchases seen in a year.

The strong buying of gold - which is traditionally seen by investors as a safe-haven asset - was seen across Europe amid growing uncertainty over central bank policy and the standoff between Athens and its creditors.

"This was the strongest start in Europe for gold coins and bars that we have seen since 2011," Alistair Hewitt, head of market intelligence at the World Gold Council told The Telegraph. "German investors are fretting over the ECB, Greece and Ukraine."

This short, but must read article, appeared on the telegraph.co.uk Internet site at 10 a.m. BST yesterday morning---and it's another contribution from Roy Stephens.

Ray Dalio: "If You Don't Own Gold, You Know Neither History Nor Economics"

Bridgewater's Ray Dalio explains in under 120 seconds why everyone should allocate some of their portfolio to gold:

"If you don't own gold...there is no sensible reason other than you don't know history or you don't know the economics of it..."

Of course, few 'status quo' believers will pay heed to the $150 billion AUM fund manager, despite his imploring everyone that to be successful, one must "Think Independently, Stay Humble".

The 2:10 minute embedded video clip is a must watch---and not to be missed is that he said it live and in person at the Council on Foreign Relations.  It's the final offering of the day from Dan Lazicki---and I thank him on your behalf.

WGC resurrects China as world No. 1 gold consumer -- Lawrence Williams

Forgive us for coming back to a subject we have covered before, but we have previously commented on our disbelief that India regained top spot as the world’s No. 1 gold consumer in 2014. This belief, which is since being perpetuated by the mainstream global media, was based on the World Gold Council (WGC)’s Gold Demand Trends report of February this year, which had India just pipping China into the No.1 spot on preliminary data. We disagreed with this assessment at the time and have pointed to other statistical analyses of the global gold market since which would also reverse this position and we are now pleased to note that the latest WGC Gold Demand Trends report has China firmly back in the No. 1 spot for 2014 with its latest consumption figure for that year put at 973.6 tonnes as against India’s 811 tonnes. China’s figure would be even higher at 1,015 tonnes if we include Hong Kong consumption which perhaps one should given that Hong Kong is a part of China even if its statistics tend to be recorded separately.

The latest WGC statistics – now provided by the Metals Focus consultancy rather than by GFMS which has provided them in the past – also suggests that Chinese consumption (excluding Hong Kong) fell by 7% in Q1 this year to 272.9 tonnes compared with Q1 2014, while India’s grew by 15% to 191.7 tonnes – which still leaves China as comfortably the No.1 global consumer.  The report also points out that the two countries between them account for 54% of total global gold consumer demand. In terms of percentage of new mined supply – put at 729 tonnes for Q1 2015 – the two countries accounted for 64%. But we also believe that, in the case of China, these figures still substantially underestimate gold flows into the country, which is in part due to a rigid calculation as to what actually is defined as ‘consumer demand’. This does not appear to include demand absorbed directly by the Chinese banking system. To back up our view withdrawals from the Shanghai Gold Exchange (SGE) in Q1 this year reached around 623 tonnes – 10.5% higher than in Q1 2014. Whether one takes SGE withdrawal figures as an accurate representation of actual Chinese demand (there are arguments over this) it is certainly an accurate indicator of the levels of Chinese gold flows.

This commentary by Lawrie put in an appearance on the mineweb.com Internet site at 2:40 p.m. London time, which was 9:40 a.m. in New York.  It's worth reading.

¤ The Funnies

¤ The Wrap

Every week, or even more frequently, I explain how position changes on the COMEX between two distinct groups of speculative traders set the price of silver and gold and other commodities. On one side are the technical funds in the managed money category of the CFTC’s Disaggregated COT Report---and on the other side are commercial traders who take the opposite position of whatever the managed money traders do. If the managed money traders buy, then the commercials sell and vice versa. It never varies.

In fact, if the managed money traders didn’t behave like Pavlov’s dogs to the stimuli of buying on upside penetrations of the moving averages and selling on downward penetrations, there would be no manipulation possible in silver or any other market. If the commercials couldn’t maneuver the technical funds in the managed money category both ways, up and down, there would be no ongoing silver manipulation, just a one-time spike up or down.

The managed money traders are, by CFTC and CME classification, purely speculative traders with absolutely no legitimate bona fide hedging purpose behind their trading. That doesn’t make them illegitimate traders or bad people, just that they are pure speculators and not hedgers. The commercials are thought of as legitimate hedgers by many, but in reality they, too, are pure speculators as they are more akin to bookmakers looking to profit when the managed money traders reverse positions; just like a bookie hopes to profit when someone bets on a basketball game of a horse race and loses. These commercials are banks and financial institutions, with nary a legitimate miner or industrial consumer in their ranks. Besides, what legitimate miner or industrial user would engage in a hedging strategy based exclusively upon making book with speculative traders with no regard to internal company requirements? - Silver analyst Ted Butler: 13 May 2015

It was another day where gold, silver and platinum were allowed to rally a bit, but it was obvious from the charts that any time they got too "irrationally exuberant" to the upside, a willing seller appeared.  That was particularly noticeable shortly after 11 a.m. in London---and also at 10:20 a.m. in New York in all three metals.  Considering the fact that all three have wildly different supply/demand fundamentals, these obvious joined-at-the-hip price movements had nothing to do with free markets.

Gold traded above, but did not close above, its 200-day moving average, although silver did---and platinum has now broken above and closed above its 50-day moving average.

Where we go from here is up in the air.  The RSI traces aren't even close to being in wildly overbought territory, so we could certainly rally from here---and I'd be happy to see it.

However, yesterday's volume numbers were, for the second day in a row, not what I wanted to see---and it's a certainty that the Commercial traders were taking on all comers in the Managed Money category as they sold short positions and went long.  And as I mentioned in yesterday's column, unless there's some hidden jiggery-pokery going on that I'm unaware of, there was big deterioration in the Commercial net short positions once again.  If a COT Report came out showing the effects of the last two trading days, it would mostly likely show that there's been shocking deterioration in the Commercial net short positions in both gold and silver.  So, for the moment, it looks like the same old, same old.

And as I write this paragraph, the London open is about fifteen minutes away.  Gold sold down a few bucks in very quiet trading in the Far East on their Friday---and is currently a hair off its low tick.  The same can be said about silver, which is currently down a dime or so.  Platinum is trading flat---and palladium is currently up three dollars.

Net volume in gold is approaching 14,000 contracts---and about 95 percent of that is of the HFT variety.  Silver's net volume is a hair over 7,000 contracts.  These are big numbers for such tiny overnight price moves---and I must admit that it doesn't bode well for the remainder of the Friday session.  The dollar index, which had been flat through most of Hong Kong trading, began to rally shortly before 1 p.m. local time---and is currently up 18 basis points.

Today we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and it's already yesterday's news.  As I said above, the price action of the last three days trumps whatever this report has to say.  I'll be talking about it in tomorrow's column, but only in the most general terms.

And as I sent today's column out the door at 5:00 a.m. EDT, there isn't much going on even though London has been open a couple of hours---and things are pretty much unchanged since I wrote the previous paragraph on the situation.

Gold volume is now up to just about 24,000 contracts---and silver's net volume is just below 10,000 contracts.  These are huge volumes for little or no price movement---and it's virtually all of the HFT variety.  There's not a producer or consumer of the metal anywhere to be found in these numbers, so supply/demand fundamentals are being trumped by the HFT boyz and their algorithms.

The dollar index is currently up 34 basis points.

I have no idea what may happen during the remainder of the Friday session, but as you already know it's only what happens during the COMEX trading session that matters---and JPMorgan et al aren't leaving any clues.  I'm expecting a down day, but would love to be spectacularly wrong.

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

Ed Steer

Fri, 15 May 2015 04:13:00 +0000
<![CDATA[India’s Q1 Gold Demand Up 15 Percent on Positive Mood]]> http://www.caseyresearch.com/gsd/edition/indias-q1-gold-demand-up-15-percent-on-positive-mood/ http://www.caseyresearch.com/gsd/edition/indias-q1-gold-demand-up-15-percent-on-positive-mood/#When:04:23:00Z "JPMorgan et al were on the job within minutes of the COMEX open"

¤ Yesterday In Gold & Silver

The gold price flat-lined all through Far East and early London trading on their Wednesday.  There was a bit of bump up at the noon London silver fix, but the real fireworks didn't start until the 8:20 a.m. EDT COMEX open.  At that point the dollar index headed south---and the gold price headed north.  Volume exploded as JPMorgan et al stepped in front of the technical funds in the Managed Money category.  Most of the gains were in by 10:30 a.m. in New York---and the absolute high tick came at the 1:30 p.m. EDT COMEX close.  It sold off a few bucks from there, before trading flat for the remainder of the electronic trading session.

The low and high ticks were recorded by the CME Group as $1,190.40 and $1,218.50 in the June contract.

Gold finished the Wednesday session at $1,215.10 spot, up $22.10 from Tuesday's close.  Gross volume was north of 283,000 contracts, but netted out to 'only' 200,000 contracts.  It should be obvious that "da boyz" threw everything they had at this rally.

Here's the 5-minute tick chart courtesy of Brad Robertson once again---and as you can see, the big volume came between the COMEX open and close, with most of it occurring between the COMEX open and 10:30 a.m. in New York.  Add two hours for EDT---and the 'click to enlarge' feature is more than helpful here.

After trading more or less sideways through most of the Far East session, silver developed a positive bias starting at 2 p.m. Hong Kong time on their Wednesday afternoon---and after that, the price chart was a virtual carbon copy of the gold chart---and certainly requires no further explanation.

The low and high ticks for silver were reported as $16.48 and $17.235 in the July contract.

Silver closed in New York yesterday at $17.09 spot, up 61 cents from Tuesday.  It would have closed up at least $61 if "da boyz" hadn't showed up.  Net volume was over the moon at 72,000 contracts, more than double what it was on Tuesday.

The platinum chart was a reasonable facsimile of the price action in gold and silver.  That white metal finished the Wednesday session at $1,147 spot, up 16 bucks on the day.

Palladium didn't do much---and it closed yesterday at $786 spot, up a dollar.

The dollar index closed very late on Tuesday afternoon in New York at 94.56---and began to weaken slightly during the Far East trading session.  It was down over 25 basis points by the London open---and rallied back to almost unchanged by the COMEX open.  Then the roof caved it.  The 93.50 low tick came about ten minutes before noon in New York---and it rallied a hair during the remainder of the Wednesday session, closing at 93.62 and down 94 basis points on the day.

Here's the 1-year U.S. Dollar chart so you can see how far it has dropped---and how much further it has [potentially] left to go.

The gold stocks gapped up and stayed up.  Their highs came at gold's high, the COMEX close---and they faded a bit from there.  The HUI finished the Wednesday session up 2.23 percent.

The silver equities rallied sharply, with almost all of their gains coming by 10:30 a.m. in New York.  After that they chopped more or less sideways for the remainder of the day.  Nick Laird's Intraday Silver Sentiment Index closed up a very decent 4.51 percent.

The CME Daily Delivery Report showed that 4 gold and 31 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In silver, the only short/issuer of note was the Japanese bank Mizuho with 28 contracts out of its client account.  Not surprisingly, JPMorgan stopped 19 contracts---8 for clients and 11 for itself.  HSBC USA stopped 12 contracts.  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 in May fell by 3 contracts down to 145, minus the 4 mentioned in the previous paragraph.  In silver, May o.i. dropped by 34 contracts, leaving 375 contracts still open, minus the 31 in the previous paragraph.

There were no reported changes in GLD yesterday, but over at SLV an authorized participant added 955,880 troy ounces.  I would expect that a very decent chunk of physical silver is owed SLV after yesterday's price action---and it's a given that the authorized participants, principally  JPMorgan, will short the shares in lieu of depositing metal, as the metal doesn't exist to satisfy that kind of demand.  It's also a given that JPMorgan won't be providing it out of their private stash, either.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs as of the close of business on Friday, May 8---and here's what they had to report.  Their gold ETF added 4,914 troy ounces, but they removed 8,429 troy ounces from their silver ETF.

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

It was a very quiet in/out session at the COMEX-approved depositories on Tuesday.  In gold, there was 2,101 troy ounces received---and 16,170 troy ounces shipped out.  In silver there was nothing received---and only 38,356 troy ounces shipped out the door.  No need to link that activity.

It was quite a bit busier at the COMEX-approved gold kilobar depositories in Hong Kong.  They received 5,507 kilobars---and shipped out 6,110 kilobars.  All of the action was at Brink's, Inc.  The link to that activity in troy ounces is here.

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

¤ Critical Reads

U.S. Retail Sales Hint at Recession, Weakest Since Financial Crisis

Despite bouncing back last month at the fastest pace in a year, April just printed the slowest YoY growth since Nov/09 at just 0.9% (retail sales has still missed expectations for 4 of the last 5 months). Against expectations of a 0.2% MoM rise in April (considerably slower than the 0.9% pop in March), Retail Sales missed with a 0.0% change. Ex-Auto and Gas MoM also missed with a mere 0.1% gain (against +0.5% exp.) but it was the control group that saw the biggest miss, printing 0.0% (against hopeful expectations of a 0.5% gain). There was widespread weakness with outright declines in autos, furniture, gas, food, electronics (AAPL hangover), and general merchandise.

What is curious is that moments ahead of the release, sell-siders were overselling the retail print to appear far more important than it is, in hopes for a big beat. CRT strategist David Ader says in note that "Retail Sales is, oddly, perhaps more important than NFP..."

This chart-filled news item appeared on the Zero Hedge website  at 8:42 a.m. EDT on Wednesday morning---and today's first story is courtesy of Dan Lazicki.

Q2 GDP Forecast Cut to 0.7% by Atlanta Fed

Zero Hedge first brought attention to the Atlanta Fed over two months ago, when the first massive divergence between bullish consensus and objective reality appeared. Since then it has been nothing but a downhill race for reality, with consensus scrambling to catch up. Moments ago, the Atlanta Fed just cut its Q2 GDP forecast once more, this time to 0.7% from 0.8%. This is on the back of a Q1 GDP which as of this moments is around -1.0%.

From the Atlanta Fed:  The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2015 was 0.7 percent on May 13, down slightly from 0.8 percent on May 5. The nowcast for second-quarter real consumer spending growth ticked down 0.1 percentage point to 2.6 percent following this morning's retail sales report from the U.S. Census Bureau.

It also means that the first half U.S. GDP print will be negative and all else equal, would suggest a technical recession. It also means that for 2015 full year GDP to print at a "growing" 2.5%, the economy will have to grow at 5% or higher in both Q3 and Q4.

Good luck with that.

This brief 2-chart story showed up on the Zero Hedge website at 11:31 a.m. EDT yesterday morning---and it's definitely worth a look---and it's the second offering in a row from Dan Lazicki.

Moody's Downgrades Chicago Credit Rating to Junk Bond Status

Moody's Investors Service announced Tuesday it has lowered Chicago credit rating to junk bond status, citing unfunded pension obligations and lagging tax revenue, in a move Mayor Rahm Emanuel called irresponsible.

Moody's downgraded the city's debt rating on bond issues backed by property, sales and fuel tax revenue to Ba1, one notch below investment grade, from Baa2. As a result, the city's borrowing costs will increase as it pays more interests to make its bonds attractive to buyers.

In making the announcement, Moody's noted the city's options for curbing growth in its unfunded pension liabilities was hurt by an Illinois Supreme Court decision. The court ruled Friday that the Legislature's restructuring of Illinois' pension obligations violated a section of the state constitution.

This news item appeared on the newsmax.com Internet site at 5:59 a.m. EDT on Wednesday morning---and it's courtesy of Brad Robertson.

Bond Rout Deepens to $433 Billion as Bull Positions Unwound

Losses from the worst global debt-market slump in two years deepened to $433 billion as investors begin to ponder how high yields will climb before stabilizing.

The value of the world’s fixed-income markets dropped to $45.07 trillion on Tuesday from $45.51 trillion on April 17, according to a Bank of America Merrill Lynch index.

Record central-bank stimulus had sent investors piling into debt at the same time that dealers pulled back from making markets -- a combination that saw investors paying a price for holding bonds with yields not far from record lows and the Federal Reserve discussing an increase in U.S. interest rates.

This Bloomberg article bears strong similarities to an Ambrose Evans-Pritchard offering I had on this subject in Wednesday's column.  This story was from early Tuesday evening Denver time---and I thank South African reader B.V. for pointing it out.

U.S. Set to Rip Up UBS Libor Accord, Seek Conviction

The U.S. Justice Department is set to rip up its agreement not to prosecute UBS Group AG for rigging benchmark interest rates, according to a person familiar with the matter, taking a new step to hold banks accountable for repeat offenses.

The move by the U.S. would be a first for the industry, making good on a March threat by a senior Justice Department official to revoke such agreements and putting banks on notice that these accords can be unwound if misconduct continues.

UBS is among the five banks that are poised to reach settlements with U.S. regulators over allegations that they manipulated currency markets, people familiar with the situation have said. Four of them -- Citigroup Inc., JPMorgan Chase & Co., Barclays Plc and Royal Bank of Scotland Group Plc -- will likely enter pleas related to antitrust violations, people familiar with the talks have said.

This is another story from the Bloomberg website.  This one put in an appearance there at 4:04 p.m. MDT on Tuesday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

Don Coxe discussed oil and bonds on BNN

In the first half of the interview, Don Coxe, Chairman, Coxe Advisors joins BNN to discuss why oil forecasters are getting it wrong, and why crude could be in for a major sell off.  This segment runs for 6:46 minutes.

The second part is headlined "Don Coxe on the bear market for bonds"---and the link to the second segment, which runs for 8:05  minutes, is here.

They were posted on the bnn.ca Internet site at 2:30 p.m. yesterday afternoon EDT.  I thank Ken Hurt for sending both of these along.

House Votes to End N.S.A.’s Bulk Phone Data Collection

The House on Wednesday overwhelmingly approved legislation to end the federal government’s bulk collection of phone records, exerting enormous pressure on Senator Mitch McConnell of Kentucky, the Senate majority leader, who insists that dragnet sweeps continue in defiance of many of those in his Republican Party.

Under the bipartisan bill, which passed 338 to 88, the Patriot Act would be changed to prohibit bulk collection by the National Security Agency of metadata charting telephone calls made by Americans. However, while the House version of the bill would take the government out of the collection business, it would not deny it access to the information. It would be in the hands of the private sector — almost certainly telecommunications companies like AT&T, Verizon and Sprint, which already keep the records for billing purposes and hold on to them from 18 months to five years.

So for the N.S.A., which has been internally questioning the cost effectiveness of bulk collection for years, the bill would make the agency’s searches somewhat less efficient, but it would not wipe them out. With the approval of the Foreign Intelligence Surveillance Court, the spy agencies or the F.B.I. could request data relevant to an investigation. Corporate executives have said that while they would have to reformat some data to satisfy government search requirements, they could most likely provide data quickly.

The legislation would also bar bulk collection of records using other tools like so-called national security letters, which are a kind of administrative subpoena.

This New York Times article, filed from Washington yesterday, was sent to me by Roy Stephens just after midnight Denver time this morning.

Water Theft Becomes Common Consequence of Ongoing California Drought

With the state of California mired in its fourth year of drought and a mandatory 25 percent reduction in water usage in place, reports of water theft have become common.

In April, The Associated Press reported that huge amounts of water went missing from the Sacramento-San Joaquin Delta and a state investigation was launched. The delta is a vital body of water, serving 23 million Californians as well as millions of farm acres, according to the Association for California Water Agencies.

The AP reported in February that a number of homeowners in Modesto, California, were fined $1,500 for allegedly taking water from a canal. In another instance, thieves in the town of North San Juan stole hundreds of gallons of water from a fire department tank.  Brad sent another story about the water crisis.

This very interesting commentary was posted on the accuweather.com Internet site yesterday---and it's the second contribution of the day from Brad Robertson.  Brad sent another story about the water crisis.  This one is headlined "The Greatest Water Crisis in the History of the United States"---and it's much more in-depth.

Hell Unleashed — Paul Craig Roberts

This is what the arrogant morons who comprise the U.S. government have stirred up:  Watch this video for its entire 1 hour 20 minutes, and then ask yourself if Washington is making a good decision by driving us into conflict with Russia. (You might have to use your cursor to push
the circle with the dot back to the beginning of the video.)

Americans, being an insouciant people, are unaware that it was Russians, not England’s Wellington, who defeated Napoleon. The Grande Army did not return from Russia. The loss broke the back of French military power.

The German Wehrmacht, which in a few days overran France and drove the British off the continent, was destroyed in Russia by the Red Army. The allied invasion of Normandy encountered only a few under-strength German units deprived of fuel. The German army and all available resources were on the Russian front.

Americans played a small role in the war against Hitler. Eisenhower cleverly waited until the Red Army had defeated Hitler, and then invaded long after the tide had turned against Germany. Today Washington claims credit for winning a war in which Washington’s role was small.

Always, controversial, but never far off the mark, this commentary by Paul appeared on this his website yesterday---and it's definitely worth reading.  I thank Dan Lazicki for sending it our way.

Prince Charles Black Spider Lobby Letters Reveal a Meddling Monarchy

The U.K. Government has published a series of letters it attempted to keep secret, showing the extent of lobbying of ministers by Prince Charles, who - as heir to the throne - is supposed to remain politically impartial.

The U.K. Supreme Court had earlier ruled that the public has the right to see the letters written by Prince Charles to senior government and Whitehall figures in which he attempted to influence government policies.

The letters — known as 'black spider' owing to the ink and handwriting — have finally been published after a ten-year battle by journalists and freedom of information campaigners, who say the British public has the right to know the extent of the Prince's lobbying of ministers.

I knew of these letters, as this story has been simmering for years---and now they're finally in the public domain.  This interesting news item appeared on the sputniknews.com Internet site at 6:19 p.m. Moscow time on their Wednesday evening, which was 11:19 a.m. EDT in Washington.  I thank reader M.A. for finding it for us.

Hollande Must Learn How to Be Leader From Putin – French Media

Russian President Vladimir Putin has established himself as a capable head of state by defending his country's national interests and winning the hearts and minds of his fellow citizens. French President Francois Hollande, meanwhile, is a "walking contradiction" and should learn a thing or two from the Russian president on how to be the leader of his country, said French Nouvelles de France.

When Russia celebrated the 70th Anniversary of its victory over Nazi Germany on May 9, Putin, together with 500,000 of his countrymen, marched down the streets of Moscow holding a picture of his father, who fought during the Great Patriotic War. In the meantime, Paris had a demonstration in support of the legalization of marijuana.

After rejecting his invitation to the Moscow Victory Parade, Hollande instead went to shake hands with the King of Saudi Arabia in Riyadh, known for its human rights abuses. Then, hoping to get approval of French voters, Hollande flew to the Antilles to attend a climate change summit and participate in the inauguration of a museum dedicated to the history of slavery.

This article appeared on the sputniknews.com Internet site very early Wednesday evening Moscow time---and I thank Roy Stephens for digging it up for us.

Macedonia unrest: ‘Warning to Skopje against new Turkish pipeline’

Macedonia has become important to the U.S. as it could become the only way for Russia’s proposed Turkish Stream pipeline to reach Central Europe, which Washington does not want, political analyst Srdja Trifkovic told Russia Today.

Some thirty people have been charged with 'terrorism' over a deadly shoot-out in Macedonia at the weekend. A fierce battle erupted between police and an armed gang in the town of Kumanovo, in the north of Macedonia. The district is populated by ethnic Albanians who make up about a quarter of Macedonia's population. Albanians answered with protests outside the Macedonian Embassy in Tirana, accusing Skopje of using violence instead of talking when dealing with ethnic Albanians. The Macedonian authorities say the gunmen were plotting terror acts against government institutions.

RT: What are the main reasons for the current unrest in the Balkans?

Srdja Trifkovic: It is rather tricky because the Albanians do not react the way they acted or reacted over the past three days without encouragement from the outside. We’ve seen this 14 years ago, in 2001 when the Albanians were caught in the village of Aracinovo, and there were some American fighters with them.

Macedonia or rather the Former Yugoslav Republic of Macedonia has become very important to the US recently because of Bulgaria’s refusal to accept the South Stream project. In the end the Bulgarians under E.U. pressure had to say “no.” And now if the Russian pipeline goes across Turkey to the Greek- Turkish border, the only way it can reach central Europe would be across Macedonia and then the old path as originally suggested through Serbia, Hungary into Austria, Slovenia, and Italy – and this is something the Americans don’t want.

The U.S. just won't give up---and it will be interesting to see how this unfolds as time goes on.  This article appeared on the Russia Today website on Tuesday afternoon Moscow time.  It's another contribution from Roy Stephens.

Breakthrough to Ukraine peace in recent days, no alternative to Minsk deal - German FM

German Foreign Minister Frank-Walter Steinmeier says there has been a serious breakthrough in fulfilling the Minsk peace road map in Ukraine. Despite any difficulties encountered, he says, the participants must press on with implementing the deal.

Steinmeier was speaking at a meeting of NATO member states diplomats in Antalya, Turkey. "Despite the fact that in two places [in eastern Ukraine] the ceasefire is still fragile, in the past few days there has been a serious breakthrough in implementing the Minsk agreements, concerning the creation of working groups," Steinmeier told the gathering.

He was referring to the decision taken on May 6 by representatives of Ukraine, Russia and the OSCE to create four working sub-groups to help implement the peace road map. They focus on security, political issues, economy and refugees. The political and economic sub-groups are scheduled to hold meetings in the Belarusian capital on May 16.

This is another news item from the Russia Today website.  This one was posted there at 3:05 p.m. yesterday afternoon Moscow time, which was 8:05 a.m. in Washington.  It's another story from Roy Stephens.  It's worth reading.

Kerry in Sochi: Ukraine’s 15 minutes of fame is probably over

John Kerry’s Sochi meetings with Vladimir Putin and Sergey Lavrov hardly dissolved years of mistrust between Washington and the Kremlin. However, they probably signaled the end of Ukraine’s period as a global cause célèbre.

John Kerry didn't travel to Sochi because he fancied an early summer jaunt to Russia’s tourist showpiece. He flew to the Black Sea pearl to do business. Serious business. By doing so, he signaled that Washington is finally prepared to leave the Ukraine crisis behind and re-engage with Russia on other matters more pressing to humanity. There are deeper headaches than the future of a corrupt, critically divided, failed state on Europe’s edge.

Kerry’s joint press conference with Sergey Lavrov was more notable for what he didn’t say than what he did mention. The Secretary of State spoke about the Middle East and the Minsk agreement. He didn’t refer to Crimea, nor did he bluster about “Russian troops” in Donbas. Indeed, Kerry made it clear that the only solution to Ukraine crisis is Minsk, Minsk and more Minsk.

The truth is that everyone is tired of Ukraine, except the diminishing band who made their names from the Maidan crisis. The media has exhausted the subject and politicians on both sides are as frustrated with their own proxies as they are with the “enemy” at this stage. What began as an emotional roller coaster has turned into a bitter disappointment for everyone in the west. The penny has slowly dropped that all the “revolution” did was replace a bunch of corrupt, albeit elected, rulers with a group of malcontents who are now stealing for themselves and their own cronies. The actors have changed but the script sounds the same to me.

This must read Op-Edge piece appeared on the Russia Today website in the wee hours of Wednesday morning Moscow time---and the stories from Roy just keep on coming.  There was another must read story on these developments.  It was posted on thesaker.is Internet site yesterday---and it's headlined "Yet another huge diplomatic victory for Russia".  I thank Larry Galearis for sharing it with us.

Oil glut worsens as OPEC market-share battle just beginning: IEA

A global oil glut is building as OPEC kingpin Saudi Arabia pumps near record highs in an attempt to win a market-share battle against stubbornly resistant U.S. shale production, the International Energy Agency (IEA) said on Wednesday.

The West's energy watchdog said in a monthly report that although higher-than-expected oil demand was helping to ease the glut, growth in global oil consumption was far from spectacular.

As a result, signs are emerging that the crude oil glut is shifting into refined products markets, which could make a recent rally in oil prices unsustainable.

This Reuters article, filed from London, put in an appearance on their Internet site early yesterday morning EDT---and it's certainly worth reading if you have the interest.  I thank Elliot Simon for bringing it to my attention---and now to yours.

‘Gulf rulers snub Camp David summit: Total disarray of U.S. policy in Mideast’

With most of the GCC countries skipping the summit at Camp David, it reflects the failure of US policy in the Middle East, as well as its declining power and influence, geopolitical analyst Ajamu Baraka from the Institute for Policy Studies told RT.

The U.S. will host a summit of Arab leaders in Camp David this week. Four out of the six counties of the Gulf Cooperation Council [GCC] have decided to skip the meeting. The only leaders who will attend the summit are the monarchs of Kuwait and Qatar; others will send lower-ranking officials.

RT: Washington's denying any 'snub'. So if there is no snub going on here, what is happening, do you think?

Ajamu Baraka: We’re seeing a reflection of total disarray of U.S. policy in the region and a reflection of its declining power and influence. Of course there was a snub. Everyone recognizes that. The issue that the US has now is how they put back in place something that resembles a coherent approach to its policy and policy’s objectives in the Middle East.

This is another interesting oil-related story.  This one showed up on the Russia Today website very early on Wednesday afternoon Moscow time---and once again I thank Roy Stephens for bringing it to our attention.

China 'Deeply Concerned' Over U.S. Plans to Patrol South China Sea

Beijing is seeking an explanation from Washington for its recently revealed plans to deploy warships in the waters off the disputed Spratly Islands in the South China Sea, the country's Foreign Ministry spokeswoman said on Wednesday.

Several media reports emerged on Tuesday that U.S. Defense Secretary Ash Carter was considering expanding military patrols around the Spratly Islands, an archipelago off the Philippine, Malaysian and Vietnamese coasts.

The islands, thought to hold potentially significant oil and gas reserves, are claimed by China, Taiwan, Malaysia, Brunei, the Philippines and Vietnam.

The latest tensions between China and the United States have emerged ahead of State Secretary John Kerry's visit to Beijing scheduled for May 16-17. Acting State Department spokeswoman Marie Harf said Kerry will meet senior Chinese government officials "to advance U.S. priorities" ahead of this June's U.S.-China Strategic and Economic Dialogue (S&ED).

This news item, filed from Beijing, was posted on the sputniknews.com website late yesterday afternoon Moscow time---and it's another contribution from Roy.

Dr. Marc Faber: Gold mining stocks good place to buy

The market forecaster they call "Dr. Doom", Marc Faber, Editor and Publisher, The Gloom, Boom & Doom Report, joins BNN to discuss the ills of the world and what's next for china and gold.

This 4:55 minute BNN video clip appeared on their website at 12:45 p.m. Wednesday afternoon EDT---and I thank Ken Hurt for his third offering in today's column.

Jim Rickards: Japan’s (Third) Lost Decade

In the early 2000s, the phrase “lost decade” began to be applied to Japan’s economic performance over the course of the 1990s. The lost decade started with the popping of one of the greatest stock market bubbles in history.

Japan’s Nikkei 225 Index hit an all-time high of 38,916 in December 1989, and then began a sickening 80% crash to a low of 7,831 in April 2003.

But the lost decade included more than just stock market losses. Japan also saw crashing property values, falling interest rates, rising unemployment, declining and stagnant GDP, and the worst demographic profile of any major economy. In short, Japan exhibited all of the hallmarks of a depression of the kind not seen since the 1930s.

As the term “lost decade” became commonplace among economists, a funny thing happened. Another decade came and went and the Japanese economy was still in depression.

This very interesting commentary by Jim showed up on the dailyreckoning.com Internet site yesterday---and my thanks go out to Dan Lazicki for sending it along.

Venezuela’s Gold Reserves – Part 1: El Oro, El BCV, y Los Bancos de Lingotes

Venezuela’s gold reserves have rarely stayed out of the financial news headlines over the last four years. From initial gold repatriation announcements in August 2011, through to gold shipments from Europe to Venezuela’s capital, Caracas, in late 2011 and early 2012, as well as the more recent negotiations on using gold in swaps and for loan collateral, the Venezuelan gold story has filled many column inches.

However, much of the coverage has been disjointed and purely focused on the story of the day. The analysis below aims to take a broader overview and to provide a big picture treatment. To understand where Venezuela’s gold got to where it is today, you have to understand where it’s been.

The analysis is divided into two parts. Part 1 starts with a short historical overview of Venezuela’s gold up to 1992, followed by an examination of where the gold, and the claims on gold, were located just prior to repatriation in 2011. It also drills down into the composition of the gold now held in the BCV vaults and shows that these bars would be expected to consist of roughly equal percentages of London Good Delivery bars and US Assay Office ‘melt’ bars.

This very long commentary by Ronan Manly was posted on the Singapore website bullionstar.com yesterday---and depending on what time zone you're in, I recommend you either top up your coffee, or blow the froth off a cold one.  It's the final offering of the day from Dan  Lazicki---and I thank him on your behalf.  I haven't had the time to read it yet, so I'm in no position to pass judgement on it, so you can be judge and jury on this one.

Silver Bullion Buying Outstripping Supply as JP Morgan ($JPM) Buys

Silver bullion remains one of the most undervalued commodities and store of value assets in the world today and therefore one of the greatest opportunities.

Indeed, we view the opportunity in silver bullion today as very much like that seen in the period from 2003 to 2006. Then, silver traded below $10 per ounce prior to sharp gains during and after the financial crisis which saw silver surge to $20 prior to a sharp correction and then surge to nearly $50 per ounce in April 2011.

It would appear that the fundamentals in the case for owning silver are as strong as ever. It has been subject to the same ongoing price suppression that has beleaguered gold in recent years which has scared many safe-haven and store of value investors out of the market.

However, the tide may now be turning as large industrial users – for whom falling prices are a bonus – come into the market.

We recently covered JP Morgan’s rapidly increasing stockpile of over 55 million ounces (either in behalf of the bank itself or clients) and rumoured JP Morgan silver acquisition of an enormous hoard of 350 million ounces of physical silver. Indeed, the blog was picked up very widely and we received much feedback – mostly positive but some critical.

This commentary on silver by Mark O'Byrne appeared on the goldcore.com Internet site yesterday---and it's certainly worth skimming, although most of what's in it has already appeared in this column.

India's Q1 gold demand up 15 per cent on positive mood: WGC

India's gold demand during the January-March quarter went up 15 per cent to 191.7 tonne compared with the same period last year, mainly on account of positive sentiment and favourable policy changes, according to the World Gold Council (WGC). The total demand stood at 167.1 tonnes during the corresponding quarter last year, according to WGC 'Gold Demand Trends First quarter 2015' report.

In value terms, India's Q1 2015 gold demand grew 9 per cent to Rs 46,730.6 crore, against Rs 42,898.6 crore during Q1 of 2014. "India's gold demand during the first quarter of 2015 was up 15 per cent compared with the corresponding quarter last year, though it is still below the 5-year average. This growth is a reflection of the muted demand in the same period as last year due to crippling gold import policies, coupled with weak economic sentiment and trade uncertainty at the time of the general elections," said WGC Managing Director, India, Somasundaram PR .

In contrast, he said, following the partial removal of the import curbs (with the exception of a duty reduction) and the Budget announcements introducing new gold products, the environment for gold has been encouraging in the past few months, resulting in buying behaviour slowly returning to normalcy.

This story showed up on the asianage.com Internet site earlier today in the Far East---and it's something I found on the Sharps Pixley website in the wee hours of this morning EDT.

Why China Is Taking Control of Physical Gold Pricing

The Chinese have always been in love with gold. And this year especially China is taking several steps to rattle gold markets. 

The country is currently lobbying to be included in the International Monetary Fund’s reserve currency and gold has a lot to do with that process. Estimates say China has amassed thousands of tons of gold reserves that could rival the United States in the future.

“It is the Chinese view that all great currencies have gained prominence in some measure because of the hard asset reserves the government standing behind the currency holds. Gold reserves both from the government and reserves held by the population are a key factor for economic security for them,” says Simon Mikhailovich, managing director at Tocqueville Bullion Reserve.

This gold-related story was posted on theepochtime.com website on Tuesday---and I found it on the gata.org Internet site.  It's worth reading.

Avery Goodman: The real reason China is buying up the world's gold

Colorado securities lawyer Avery B. Goodman writes tonight that China's vast acquisition of gold is meant to create a mechanism for controlling the currency markets and devaluing the yuan against the U.S. dollar as convenient while escaping charges of currency market manipulation.

Drawing on a crucial U.S. State Department document unearthed by GATA, Goodman writes: "Whoever controls the price of gold against their own currency controls the price of gold against any other currency that gold is denominated in. When China increases the number of yuan it takes to purchase an ounce of gold, the dollar will respond by rising in value, even though China will not be pegging its yuan directly against the dollar." Chinese goods thereby will become cheaper against U.S.-made goods, preserving China's advantages in world trade.

Goodman continues: "Control over the worldwide currency markets is why China wants to control the gold market. It is already taking affirmative steps to establish that control, and that is what is behind the announcement that the Shanghai Gold Exchange will establish a yuan-based gold fix before the end of 2015."

This commentary by Avery was embedded in a GATA release yesterday evening---and it contains one other worthwhile link as well.  It's definitely worth reading.

¤ The Funnies

¤ The Wrap

How did it get to the point where, as a silver analyst, I spend almost all of my time talking about price manipulation---and not about actual market fundamentals? Where I make consistent ugly accusations about the nation’s most important bank, the world’s leading derivatives exchange---and the federal commodities regulator?  Where I raise issues that I know are substantive and that should be forcefully addressed by these entities, yet am met only with silence?

I’ve been thinking about these questions and of little else. Either JPMorgan has had nothing to do with the silver manipulation since taking over Bear Stearns in 2008 or everything to do with it, including amassing hundreds of millions of actual ounces over the past four years at prices the bank deliberately rigged lower. Either the CME Group is running a modern day bucket shop with little participation by real producers and consumers, proven by the U.S. Government’s own data and one’s own eyes, or I am out to lunch and know little of what I speak. Either the CFTC has convincing logical explanations that refute my allegations that it is turning a blind eye to its most important mission and chooses to keep those explanations to itself, or it is afraid to openly address the issues for fear it will expose itself as an enabler of the manipulation.  - Silver analyst Ted Butler: 13 May 2015

The COMEX open was the starting gun for a sell-the-dollar/buy-gold frenzy that we haven't seen for a while.  A similar situation in the dollar index occurred 24 hours prior to that, but precious metal prices were held in place by the "da boyz" and their algorithms.  You have to wonder what was so different about the dollar decline on Tuesday vs. yesterday.  The answer is---I don't know.

Anyway, JPMorgan et al were on the job within minutes of the COMEX open---and literally threw everything they had at precious metal prices to prevent them from blasting to the outer edges of the known universe, which is where they would have ended up if they hadn't stepped in front of these rallies.  As I mentioned at the top of this column, net gold volume was over the moon at 200,000 contracts---and silver's net volume was sky-high as well at 72,000 contracts.

Without doubt the technical funds in the Managed Money category were buying longs and selling shorts---and 'da boyz' were in there as sellers of last resort on the other side of all these trades.  If they hadn't been there, we would be looking at gold and silver prices that would have made your eyes water.

Unless I'm reading this all wrong---and the Commercials are pulling a fast one behind a lot of spread trades---there was massive deterioration in the Commercial net short positions in gold, silver and platinum yesterday.  But, as I carefully noted---and as Ted Butler pointed out on the phone---all this activity occurred on Wednesday, the day after the cut-off for tomorrow's Commitment of Traders Report.  That's a trick of theirs that I've seen them pull many times over the last ten years or so.  We'll have to wait more than a week before we can see what really happened yesterday---and anything can happen between now and then, and it just might.

Here are the 6-month charts for all four precious metals.  Not only did the 50-day moving averages get obliterated to the upside in both gold and silver, but both metals also closed just below their respective 200-day moving averages as well.

Just checking the RSI traces on gold and silver, you can see that we're not anywhere near overbought, but a couple of more days of price action like yesterday---and we'll be there.  So we'll just have to wait it out and see what JPMorgan et al have in store for us in the days ahead.  Yesterday's price action was strictly a COMEX affair---Managed Money vs. the Commercials, as always---and had nothing to do with supply/demand fundamentals.

And as I write this paragraph, the London open is about fifteen minutes away.  Both gold and silver sagged a hair in morning trading in the Far East, but around 1:45 p.m. Hong Kong time, prices turned higher---and both gold and silver are trading a bit above their Wednesday closing prices in New York.  Ditto for platinum and palladium.

Net gold volume is approaching 18,000 contracts, but most of the volume is of the HFT variety.  Silver's net volume is very respectable at 5,600 contracts.  The dollar index has been sliding quietly lower through the entire Far East and Middle East trading sessions---and is currently down 14 basis points.

Although was I was happy to see these rallies, I was disappointed that it appears that it's the same old, same old---as "da boyz" stepped in front of them as well.  Using past as prologue, they'll end the same way as they always have.  But, having said that, we could have quite a ride between now and then---and as I said a few paragraphs ago, we'll just have to wait it out and see what the powers-that-be have in store for precious metals.  Things might be different this time, but I doubt it.

And as I send today's effort off into cyberspace at 5:05 a.m. EDT, I note that the tiny rallies that began an hour or so before the London open, all ended there---and all four precious metals are back to unchanged or down a bit on the day.  Net gold volume is now pushing 32,000 contracts---and silver's net volume is about 9,800 contracts.

Virtually all of this is of the HFT variety---and it's obvious, at least to me, that precious metal prices are being held firmly in place as the dollar index continues to sink.  At the moment it's down 17 basis points, but was down over 40 basis points about forty-five minutes before London opened.

Yesterday's price action during the COMEX trading session came as a surprise---and for that reason, nothing I see on my computer screen later this morning will come as a shock, either.

I hope your day goes well---and I'll see you here tomorrow.

Ed Steer

Thu, 14 May 2015 04:23:00 +0000