<![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[How Central Banks Mislead on Gold Reserve Reporting—Lawrence Williams]]> http://www.caseyresearch.com/gsd/edition/how-central-banks-mislead-on-gold-reserve-reporting-lawrence-williams/ http://www.caseyresearch.com/gsd/edition/how-central-banks-mislead-on-gold-reserve-reporting-lawrence-williams/#When:08:23:00Z "Another day---and more slices"

¤ Yesterday In Gold & Silver

It was a fairly quiet trading day from a price perspective in the Far East on their Friday.  The price developed a negative bias right out of the gate, with the low coming at 1 p.m. in Hong Kong trading.  The tiny rally after that made it back above the Thursday close in New York by a few dollars around 8:30 a.m. in London---and then it was down hill until 12:30 BST.  The price chopped sideways into the London p.m. "fix"---and once that was out of the way, the HFT boyz spun their algorithms.  The absolute low tick came minutes before 1 p.m. EDT---and the gold price crawled higher from there into the 5:15 p.m. close of electronic trading.

The high and low ticks were recorded by the CME Group as $1,195.40 and $1,174.10 in the June contract.

Gold finished the Friday session at $1,180.40 spot, down $13.10 from Thursday's close.  Net volume was very decent at 143,000 contracts.

Here's the 5-minute tick gold chart courtesy of Brad Robertson.  As you can see, the only volume that mattered occurred during the COMEX trading session in New York, with the biggest volume coming between 8 a.m. and 9 a.m. Mountain Standard Time on this chart.  That was when JPMorgan et al appeared once the p.m. gold fix was in.  The dark gray vertical line is midnight in New York/noon in Hong Kong.  Add two hours for EDT---and don't forget the 'click to enlarge' feature.  The chart is worth a quick look.

Silver followed the same price path as gold, but the low tick in that metal came shortly after the London p.m. gold fix---and then it rallied a decent amount off its low by 11 a.m. EDT.  After the it didn't do much, although it popped a few pennies at the close.

The high and low ticks in silver were recorded as $15.885 and $15.55 in the May contract.

Silver closed yesterday in New York at $15.755 spot, down only 9.5 cents---and well off its low.  Gross volume was just under 99,000 contracts, but when everything was netted out, the volume fell down to only 26,000 contracts.

It was more or less the same chart pattern for platinum, except the sell-off at the gold fix wasn't anywhere near as severe---and the low tick came minutes before the COMEX close.  It recovered five dollars or so off its low by the close.  Platinum finished the day at $1,123 spot, down 11 dollars from Thursday's close.

Palladium followed a different path---and both its attempted rallies, particularly the one that began at the COMEX open, got dealt with in the same old way.  Palladium finished the Friday session at $768 spot, down a buck.

The dollar index closed late on Thursday afternoon in New York at 97.31---and made it to its 97.57 high tick shortly before noon in Hong Kong.  It fell down to 96.80 by 8:20 a.m. in London---and manged to struggle back to the 97.30 mark by noon BST, but headed lower once the London p.m. gold fix was in at 10 a.m. EDT---and after 11 a.m. the index chopped sideways for the remainder of the New York trading session.  The dollar index closed at 96.90---down 41 basis points from Thursday's close.

And as you should carefully note once again, what happened in the precious metal market from a price perspective had diddly to do with what was going on in the currencies yesterday.

The gold stocks flirted with positive territory at the open, but rolled over pretty quick once the gold price began to turn lower---and the low came at  gold's low tick minutes after the London fix was in.  They recovered a bit from there, but that didn't last---and the gold stocks closed just off their lows, as the HUI finished down 1.64 percent.

The silver equities followed an identical path to their golden brethren, except Nick Laird's Intraday Silver Sentiment Index closed down 2.12 percent.

Nick informed me that the HUI was down 1.65 percent on the week---and the Intraday Silver Sentiment index closed lower by 3.77 percent.

The CME Daily Delivery Report showed that 25 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.   HSBC USA was the short/issuer on 24 contracts---and Scotiabank stopped 12 of them---and JPMorgan stopped 13 contracts, all for its in-house [proprietary] trading account. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest remaining in April rose by one contract to 441 contracts---and silver's remaining April o.i. was unchanged at 22 contracts.  Twenty-five of those gold contracts are being delivered on Tuesday as per the previous paragraph, so that means that the rest [along with the 22 silver contracts] should be posted for delivery on Wednesday---and that will be in Monday's Preliminary Report.  It's going right down to the wire again this month.

There were no reported changes in GLD yesterday---and as of 7:57 p.m. EDT yesterday evening, there were no reported changes in SLV, either.  When I checked back at 2:25 a.m. this morning, I noted that, much to my surprise, an authorized participant had added another 956,120 troy ounces.  Based on the price activity over the last couple of weeks, the 7.4 million troy ounces added over that time period were done to cover an existing short position in SLV.

While on the subject of the short position in SLV and GLD, the good folks over at shortsqueeze.com update their website with the short position in both these ETFs as of the close of trading on April 15.

The short position in SLV declined from 19.55 million shares/troy ounces, down to 18.53 million shares/troy ounces---5.23 percent.  I was expecting/hoping for more, but the numbers are what they are.  The short position in GLD rose 5.16 percent, from 1.46 million troy ounces, up to 1.53 million troy ounces.

The 4.3 million ounces of silver added to SLV since the 15th won't show up until their next report, which will be on May 8 or 11.

There was a sales report from the U.S. Mint yesterday.  They sold 243,000 silver eagles---and that was all.

Month-to-date the mint has sold 17,000 troy ounces of gold eagles---8,000 one-ounce 24K gold buffaloes---and 2,173,500 silver eagles.  Based on these sales, the silver/gold ratio for the month works out to 87 to 1.

And I'm still waiting for the 2014 annual report from the Royal Canadian Mint---and I'm wondering what the hold-up might be.  Hopefully it won't be too much longer.

There was no gold reported received at the COMEX-approved depositories on Thursday, but a chunky 160,384 troy ounces were withdrawn.  And except for two kilobars, all of it came out of Scotiabank's vault.  The link to that action is here.

There was no in/out activity in silver at all.

It was another huge day over at the COMEX-approved gold kilobar depositories in Hong Kong.  Brink's, Inc. reported receiving 5,802 kilobars---and shipped out a whopping 11,190 of them.  These are big, big movements, dear reader!  The link to this activity in troy ounces is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was pretty much as I was expecting/hoping for in gold, but silver was a monstrous surprise.

In silver, the Commercial net short position declined by a stunning 10,029 contracts, which was more than double what I was expecting/hoping for.  The new Commercial net short position is now down to 169,000 million troy ounces---a 50 million ounce improvement in one week.

The Big 4 short holders covered around 2,300 short contracts.  The '5 through 8' big short holders actually added about 2,000 contracts to their short position during the reporting week---and Ted's raptors, the small Commercial traders other than the Big 8, added about 9,800 contracts to their long positions.  Ted estimates JPMorgan's short-side corner in the COMEX futures market in silver is now down to around 15,000 contracts.  Not to be forgotten in all of this is the short position in silver held by Canada's Scotiabank.  I would estimate their short-side corner in the COMEX silver market to be something north of 20,000 contracts.

Under the hood in the Disaggregated COT Report in silver, the improvement in the Managed Money category was even bigger, as they sold 2,871 long contracts and added 8,925 short contracts, which is a swing of 11,796 contracts in just one reporting week!  That has to be one of the biggest 1-week changes on record.

And all of the above occurred on a price decline of about 50 cents!  That was the shocker for me.  There was absolutely nothing in silver's 6-month chart that indicated this level of change in the internal structure of the COT Report in silver---and I'll have more on this later.

In gold, the Commercial net short position increased by a smallish 1,413 contracts, or 141,300 troy ounces, which was more or less right in line with what I was expecting to see.  The Commercial net short position now sits at 15.43 million troy ounces.

The Big 4 covered 3,000 short contracts, the '5 through 8' traders added about 1,900 contracts to their short position---and the small Commercial traders sold 2,500 long contracts.

Under the hood in the Disaggregated COT Report, there was little net change by the technical funds in the Managed Money category, as they sold 2,180 long contracts, but also reduced their short position by 2,256 contracts---so it was within 76 contracts of being a wash.  Nothing to see here.

Of course, since the Tuesday cut-off there has been further improvement in the Commercial net short positions in both gold and silver---but particularly in gold, now that the 50-day moving average was pierced to the down-side on Wednesday.  Ted figures that even with the improvements we've seen over the last three trading days, we're still around 30,000 contracts off our lows from about five weeks ago.  And just eyeballing the 6-month gold chart, a price move of $30 to $35 lower from Friday's low tick should just about do it.

Ted figures we're at the lows in silver already.

Here's Nick's "Days of World Production to Cover COMEX Short Positions" chart showing the short positions of the Big 4 and Big 8 traders, which are the current short positions held by these traders that I just discussed in the previous paragraphs.   The chart hasn't changed much in the 15 years that I've been following it, as the four precious metals are still pinned to the far-right hand side of this graph.

Here's another chart courtesy of Nick Laird.  This one shows the gold withdrawals from the Shanghai gold exchange as of Friday, April 17---and during that week there was 49.954 tonnes withdrawn.  Here's Nick's most excellent chart.

I must admit that I've got a fair number of stories today, including a decent number that I've been saving for the weekend, so I hope you have enough time to read the ones that interest you.

¤ Critical Reads

Worst Drop in Core Durable Goods Since December 2012

Having missed expectations for 5 of the last 7 months, Durable Goods New Orders jumped 4% MoM in March - the biggest jump since the July Boeing aberration all driven by a 112% surge in defense Aircraft new orders. Not surprisingly the Department of Commerce tried to pull this trick off in late 2007 in a last gasp desperate attempt to mask the arrival of the US recession then.

Durable Goods New Orders (ex-Transports) fell 0.2% MoM (missing expectations of a 0.3% rise) for the biggest YoY drop since 2012, some -1/9%, and under the covers it is ugly - Capital Goods New Orders non-defense, ex-aircraft have now fallen for 7 straight months, missing expectations dramatically (-0.5% vs +0.3% exp.). These numbers have never fallen for this long a period without a recession.

Durable Goods New Orders Ex-Transports... never fallen for this long without a recession.

This must read Zero Hedge piece appeared on their Internet site at 8:44 a.m. Friday morning EDT---and today's first news item is courtesy of Dan Lazicki.

Dear CFTC... Here is Today's Illegal S&P 500 "Spoofing"

Dear CFTC commissioners:

Following this week's first in a long series of articles showcasing the ongoing manipulation in the S&P courtesy of E-mini spoofing, we are delighted to inform you that even though you heroically used a whistleblower's tip to capture the sole Flash Crash mastermind, Nav Sarao, five years after a flash crash which your peers at the SEC incorrectly claimed was the work of a small Kansas City-based mutual fund, the manipulation - as you called it - of the S&P 500 continues.

By way of example, here is some very clear evidence (courtesy of Nanex) showing "spoofing" - the very charge that Sarao is being scapegoated on - occurring twice in the space of a few minutes this morning...

This brief Zero Hedge article was posted on their Internet site at 1:17 p.m. EDT yesterday afternoon---and it's another offering from Dan Lazicki.

In an Unrigged World: Here's How a Record S&P Close Was Manufactured

Judging by the action today, all that mattered today was 2117.39 - that is the S&P 500's previous closing record high from March 2nd. One glimpse at the charts below and the VIX-slamming is evident (especially at the close) as each time it came close to losing the record high, a miraculous deep-pocketed volatility-seller stepped in...

Look at the open in VIX too!  Welcome to the new normal.

This tiny Zero Hedge piece from yesterday appeared on their Internet site at 4:19 p.m. EDT---and I thank Dan Lazicki for his third offering in a row.  The two embedded charts are definitely worth your time.

Gold Monkey-Hammered, Crude Clubbed As NASDAQ Surges

Amid the 'glorious' earnings last night, NASDAQ is on its own today, surging to higher highs as The Dow and S&P are unchanged to down. As this exuberance exudes, gold and silver are being smashed lower... which is odd given the ECB's threat to pull Greek financing. Crude prices are also tumbling post-Durable Goods.

This short chart-laden Zero Hedge piece appeared on their website at 10:09 a.m. EDT yesterday while JPMorgan et al were putting the boots to the gold price.  It's another story courtesy of Dan Lazicki.

Santelli Exchange: Banks---and the war on paper money?

CNBC's Rick Santelli discusses investing in banks and analyzes cash in an electric society---and he doesn't pull too many punches.

This 3:09 minute video clip appeared on the CNBC website around 10 a.m. EDT on Monday---and the stories from Dan just keep on coming.

The Death of Cash: Could negative interest rates create an existential crisis for money itself?

JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far.

Pause for a second and marvel at how strange this is. Banks have always paid interest to depositors. We’ve entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick Bunker, a policy analyst at the Washington Center for Equitable Growth, was so dazzled by interest rates’ falling into negative territory that he headlined his analysis after a Doors song, Break on Through (to the Other Side).

In recent months, negative rates have become widespread in Europe’s financial capitals. The European Central Bank, struggling to ignite growth, has a deposit rate of –0.2 percent. The Swiss National Bank, which worries that a rise of the Swiss franc will hurt trade, has a deposit rate of –0.75 percent. On April 21 the cost for banks to borrow from each other in euros (the euro interbank offered rate, or Euribor) tipped negative for the first time. And as of April 17, bonds comprising 31 percent of the value of the Bloomberg Eurozone Sovereign Bond Index—€1.8 trillion ($1.93 trillion) worth—were trading with negative yields. (Although dollar interest rates are higher, JPMorgan Chase’s balance sheet utilization fee fits the pattern: In today’s low-rate world, the only way it can shed deposits in response to new regulations is to go all the way to less than zero.)

This longish Bloomberg article showed up on their Internet site at 6:00 a.m. Denver time on Thursday morning---and I thank Norman Willis for his first contribution of the day.

"I’m Not Crazy, I’m Scared" - Why For One Trader, This Time it is Different

The SPX flirted with all-time highs. The NASDAQ Index made 15 year highs; Chinese equities, and so many other equity indices are flying. Bonds sold off this week, but the German 10-year yield is still ~17bps, the U.S. 10-year yield unable to get beyond 2%, and Greek bonds had a two-day rally that would be truly impressive if it wasn’t on volume that made it just an exercise moving wide bid/offer spreads, representing sentiment not trading.

The USD is selling off on the view that Greece is saved, the Fed is scared, and a “we can’t sit with positions because it never works” mentality. The only really new thing the market needs to digest is that commodities may be nearing a bottom

Happy days seemingly, but there have been some very discordant and troubling comments from the creme de la creme of smart - and big - investors.

Over the last three days, we have reported that some of the most important investment voices in the world are more than a little scared about the ravenous appetite for risk playing out in the market, and the fact that they have been ignored is beyond unnerving. Central banks are driving all investment decisions, and what this implies is that they are in this trade so  deeply that there is no obvious or practical exit.

This commentary by Bloomberg's Richard Breslow showed up on the Zero Hedge Internet site at 9:52 a.m. EDT on Friday---and it's definitely worth reading.  I thank Dan Lazicki for finding it for us.

Doug Noland: Pro-Bubble

Some estimates have over $1.0 Trillion of corrupt “money” having fled China. How much has made it to U.S. real estate and securities markets? For that matter, how much global finance Bubble “dirty money” has made its way to America? How much legitimate wealth has escaped local fragility for greener U.S. pastures – from China, Russia, Brazil, Venezuela, Latin America, Europe and the Middle East? And how much “hot money” has been unleashed by respective QE currency devaluations from the Bank of Japan and European Central Bank? How big are global leveraged “carry trades”? What have been the impacts and what are the ramifications from these historic flows that I view as unsound, unstable and unsustainable?

By this point, things have gone way beyond the late-nineties “king dollar” dynamic. Recent years have seen unprecedented global flow instability – literally Trillions flowing to and fro in an unremitting chase for returns. The closest parallel is the profoundly unstable global backdrop from the late-twenties. And like the “Roaring Twenties,” few today appreciate how deeply systemic all the unsound finance has become – not with stocks at record highs, bond prices at record highs and household net worth at all-time highs.

Doug's is the voice of financial sanity in a world gone mad.  His weekly Credit Bubble Bulletin was posted on his website Friday evening---and I thank reader U.D. for sending it our way.

Here’s How to Download and Delete What Google Search Knows About You

Have you ever wondered what Google Search really knows about you? Well, now you can check, as Google has added a new feature that lets you view and download your entire search history.

Yep. Everything.

The feature, which was spotted by the unofficial Google Operating System Blog — though VentureBeat points out that the function was made available in January — gives you access to everything from what you searched for to the links you clicked on from those searches. It also shows you the addresses you’ve searched for.

I was even able to see the list of images I clicked on while searching for pictures of cats eating spaghetti. Now imagine what you’ve looked for. Oh, and clearing your browser history won’t delete this data.

But there’s no reason to panic, because in addition to being able to download your search history, you can clear it.

This interesting article put in an appearance on the yahoo.com Internet site yesterday---and it's the second offering of the day from Norman Willis.

Wal-Mart mysteriously closed 5 stores, and some people have a wacky conspiracy theory about why

Thousands of Wal-Mart employees are fighting to get their jobs back after Wal-Mart suddenly closed five stores last week without warning.

The retailer said it closed the stores in California, Texas, Oklahoma, and Florida because of persistent plumbing issues that could take as long as six months to fix.

More than 2,200 workers were laid off as a result and given two months of severance pay.

But some critics are skeptical that Wal-Mart closed the stores because of plumbing issues.

This very interesting story is one that I was saving for my Saturday column.  It appeared on the businessinsider.com Internet site at 4:14 p.m. on Tuesday---and it's already had over 216,000 hits.  It's the first offering of the day from Roy Stephens.

Cash Flowed to Clinton Foundation Amid Russian Uranium Deal

The headline on the website Pravda trumpeted President Vladimir V. Putin’s latest coup, its nationalistic fervor recalling an era when its precursor served as the official mouthpiece of the Kremlin: “Russian Nuclear Energy Conquers the World.”

The article, in January 2013, detailed how the Russian atomic energy agency, Rosatom, had taken over a Canadian company with uranium-mining stakes stretching from Central Asia to the American West. The deal made Rosatom one of the world’s largest uranium producers and brought Mr. Putin closer to his goal of controlling much of the global uranium supply chain.

But the untold story behind that story is one that involves not just the Russian president, but also a former American president and a woman who would like to be the next one.

This longish essay was posted on The New York Times on Thursday---and for length and content reasons had to wait for today's column.  I thank Roy Stephens for bringing it to our attention.  There was another story about Hillary and donations that was posted on the foxnews.com Internet site yesterday---and that one is headlined "Many Clinton charity donors also got State Department awards under Hillary".  I thank reader H.W. for sliding it into my in-box at 11:50 p.m. Denver time last night.

Puerto Rico Warns of Imminent Government Shutdown Due to "Liquidity Crisis"

Puerto Rico's top finance officials said the government of the U.S. territory will likely shutdown in three months because of a looming liquidity crisis and warned of a devastating impact on the island's economy.

In a letter to leading lawmakers, including Governor Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances currently looked unlikely to succeed. It warned of laying off government employees and reducing public services.

"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."

The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.

This is the Zero Hedge spin on a Reuters story from yesterday.  It appeared on the ZH Internet site at 12:10 p.m. EDT yesterday---and I thank reader 'David in California' for passing it around.

Hundreds evacuated as Chilean volcano erupts for first time in 40 years and sends huge plume of ash into the sky

Yes, I know I posted something about this in yesterday's column, but this was worth posting.  This spectacular photo essay put in an appearance on the dailymail.co.uk Internet site at 1:29 BST on Thursday morning---and they're definitely worth scrolling through.  I thank reader M.A. for bringing them to my attention---and now to yours.

HSBC considers leaving the U.K. in wake of tax grabs

HSBC fired a warning shot to the Government on Friday by revealing that the weight of regulation imposed on Britain’s biggest bank since the financial crisis may force it to move its headquarters away from the U.K.

In a surprise announcement ahead of the bank's annual meeting, which came just two weeks before the general election, HSBC’s chairman Douglas Flint said it was launching a review into “where the best place is for HSBC to be headquartered in this new environment”.

Such a move would be likely to take several years, be extremely expensive and force the company to reapply for hundreds of banking licences, but investors celebrated the announcement, with shares in the bank rising by more than 2pc.

Hong Kong, where HSBC was domiciled until it moved to the U.K. in 1993 and which is seen as the most likely destination should it exit London, welcomed the review.

This very interesting article appeared on The Telegraph's website at 8:00 p.m. BST on Friday evening, which was 3:00 p.m. EDT.  It's obviously been edited, because I pulled it off their website just before midnight MDT on Thursday evening.

Price of Stalling: Upkeep of Mistral Warships Costs France €5 Million a Month

France and Moscow failed to reach an agreement for the delivery of two Mistral ships during a meeting between Francois Hollande and Vladimir Putin in Yerevan, Armenia. Now, the upkeep and maintenance cost for the two ships, sitting at a French port, will cost French taxpayers €5 million per month.

Russian President Vladimir Putin met his French counterpart Francois Hollande at a commemoration event in Yerevan, the Armenian capital, for the 100th anniversary of the Armenian Genocide.

The two presidents spoke about the failed delivery of two Mistral-class helicopter carriers to Russia and attempted to re-negotiate the deal. However, the Friday meeting did not bring any results and the deal still remains frozen.

Earlier this week, Hollande said that France will return the money for the failed Mistral deal, stating that the delivery of the helicopter carriers was still not possible.

This article was posted on the sputniknews.com Internet site at 8:01 p.m. Moscow time on their Friday evening, which was 1:01 p.m. EDT in Washington.  I thank Roy Stephens for bringing it to our attention.

Spying Close to Home: German Intelligence Under Fire for NSA Cooperation

It was obvious from its construction speed just how important the new site in Bavaria was to the Americans. Only four-and-a-half months after it was begun, the new, surveillance-proof building at the Mangfall Kaserne in Bad Aibling was finished. The structure had a metal exterior and no windows, which led to its derogatory nickname among members of the Bundesnachrichtendienst (BND), the German foreign intelligence agency: The "tin can."

The construction project was an expression of an especially close and trusting cooperation between the American National Security Agency (NSA) and the BND. Bad Aibling had formerly been a base for US espionage before it was officially turned over to the BND in 2004. But the "tin can" was built after the handover took place.

The heads of the two intelligence agencies had agreed to continue cooperating there in secret. Together, they established joint working groups, one for the acquisition of data, called Joint Sigint Activity, and one for the analysis of that data, known as the Joint Analysis Center.

But the Germans were apparently not supposed to know everything their partners in the "tin can" were doing. The Americans weren't just interested in terrorism; they also used their technical abilities to spy on companies and agencies in Western Europe. They didn't even shy away from pursuing German targets.

The Germans noticed -- in 2008, if not sooner. But nothing was done about it until 2013, when an analysis triggered by whistleblower Edward Snowden's leaks showed that the US was using the facility to spy on German and Western European targets.

This very interesting article put in an appearance on the German website spiegel.de at 7:20 p.m. Europe time on Friday evening---and it's definitely worth reading if you have the interest.  It's another offering from Roy Stephens.

On the #Gredge: Greece and E.U. finance ministers fail to reach deal in Riga

Grexit? Gredge? Graccident? Grimbo? Each clever hashtag to describe Greece defaulting and leaving the eurozone is becoming more a reality, after talks between Greece and its EU creditors to unlock €7.2 billion for Athens to pay off its IMF debt failed.

"A comprehensive deal is necessary before any disbursement can take place," Eurogroup President Jeroen Dijsselbloeme said at the press conference in Riga following the meeting Friday. "Responsibility for that relies mainly on Greece," he said, adding that too much time was lost during the past 2 months.

Greece’s four month bailout extension expires in June.

Eurozone finance ministers held Greek debt talks in Riga, Latvia to discuss unlocking bailout funds, so Greece can pay its next $450 million repayment on an IMF loan. The bailout will help Greece’s struggling economy live through several debt repayments due over the course of the next two months. The euro declined on the news of no deal.

This news story showed up on the Russia Today website at 11:15 a.m. Moscow time on their Friday morning---and once again it's courtesy of Roy Stephens.  Another story on the same issue appeared on the irishtimes.com Internet site at 7:52 a.m. BST yesterday morning---and it's headlined "Euro zone warns Greece no cash till full reform deal"---and my thanks go out to Roy S. once again.

U.S. alarmed by Greek energy alliance with Russia

The US is scrambling to head off a Greek pipeline deal with Russia, fearing a disastrous change in the strategic balance of the Eastern Mediterranean as Greece’s radical-Left government drifts into the Kremlin’s orbit.

Ernest Moniz, the US Energy Secretary, said his country is pushing for an alternative gas pipeline from Azerbaijan that would help break the stranglehold that Russian state-controlled firm Gazprom has on European markets.

“Diversified supplies are important and we strongly support the ‘Southern Corridor’ to bring Caspian gas to Europe,” he told a group of reporters on the margins of CERAWeek oil and gas forum in Houston.

He insisted that it was vital to uphold “collective energy security” in Europe.

Greece’s foreign minister, Nikos Kotzias, said Gazprom made a “very good offer”, with guaranteed gas supplies for 10 years at good prices. He asked how his Syriza government could justify turning down such an opportunity unless the Western powers could come up with something better.

This commentary by Ambrose Evans-Pritchard appeared up on the telegraph.co.uk Internet site at 7:57 p.m. BST on Thursday evening---and it's another story courtesy of Roy Stephens.

One Hundred Years of Silence: Turks Slowly Take Stock of Armenian Genocide

A church like that can help a person, says Armen. It can help them from giving up hope -- and that is indeed something.

The fact that the church is even standing here -- beautiful and steadfast in a place that was only recently the site of ruins -- instills a sense of courage, says Armen. And courage is something that is badly needed in these parts, especially in Diyarbakir.

The city is located in southeastern Turkey, deep in the Anatolian mountain region. Diyarbakir is gray, loud and lackluster. But it does have one special landmark -- the stylishly restored St. Giragos Church, located in the Old Town, a labyrinth of crumbling homes and alleys that reverberate with children's shouts as they kick around a soccer ball.

It's a Christian-Armenian church, the first of its kind to be rebuilt and highly symbolic in a city like Diyarbakir. The builders say that attempts were made to prevent the reconstruction, hinting that they may have been linked to some of the politicians involved in the project. Indeed, some felt provoked by the restoration of the church.

For others, the church is a symbol of a major political shift that has gripped Turkish society, a symbol of a willingness to confront its history. The church also helps people to remember and reaffirm their true identity. People like Armen.

This very interesting article was posted on the spiegel.de website back on Tuesday---and is another one of those stories that had to wait for my Saturday column.  I haven't read it yet, either, but it's certainly on my must read list today or tomorrow.  Once again I thank Roy Stephens for finding it for us.

All aboard the Lisbon to Vladivostok train, no stops in Kiev or Warsaw

In recent days the German Chancellor Angela Merkel again allowed herself to talk about a common geopolitical and economic European space, including Russia. In my opinion this statement could be regarded as a feat, considering all the pressure that Washington has been exerting on Germany.

"In the future we see a major economic trading zone, which includes Russia.” - said Frau Merkel on April 17th at an economic forum in Stralsund. And taking a deep breath, boldly added, "We progress step by step, and move closer to a common economic space, and just like Vladimir Putin once said, it will be 'from Vladivostok to Lisbon.' "

Angela Merkel of course mentioned Putin, hated in the USA, for a reason. Yet despite of that, the Chancellor made it clear that Germany will try to defend its sovereignty. After all, only Americans share the view that the Russian President is the devil incarnate.  The steps towards an economic Euro-Asian trade zone seem logical and consistent for the Europeans.

Having said that, Washington's goal for the Europeans is not a big family secret.

At an accelerated pace, the plans are to complete the construction of a "Hate Belt," that includes various Russophobic States from the Baltic all the way to the Black sea, states that would hinder the development and strengthening of economic relations between Russia and the European Union. In fact, there are only two ways left through which you can deliver and trade goods: across land through Belarus and then through Poland, or by sea through St. Petersburg. At this moment and time, no sane businessman would attempt to deliver and trade goods via Ukraine.

This very interesting commentary was posted on the fortruss.blogspot.co.uk Internet site on Tuesday---and it's definitely worth reading if you're a serious student of the New Great Game.

It's courtesy of Roy Stephens, of course.

What does Putin want? A major analysis by Rostislav Ishchenko

The analysis below is, by far, the best I have seen since the beginning of the conflict in the Ukraine.  I have regularly posted analyses by Ishchenko on this blog before, because I considered him as one of the best analysts in Russia.  This time, however, Ishchenko has truly produced a masterpiece: a comprehensive analysis of the geostrategic position of Russia and a clear and, I believe, absolutely accurate analysis of the entire “Putin strategy” for the Ukraine.  I have always said that this conflict is not about the Ukraine but about the future of the planet and that there is no “Novorussian” or even “Ukrainian” solution, but that the only possible outcome is a strategic victory of either Russia or the USA which will affect the entire planet.  Ishchenko does a superb overview of the risks and options for both sides and offers the first comprehensive “key” to the apparently incomprehensible behavior of Russia in this conflict.  Finally, Ishchenko also fully understands the complex and subtle dynamics inside Russian society.  When he writes “Russian power is authoritative, rather than authoritarian” he is spot on, and explains more in seven words than what you would get by reading the billions of useless words written by so-called “experts” trying to describe the Russian reality.

We all owe a huge debt of gratitude to Denis, Gideon and Robin for translating this seminal text, which was very difficult to translate.  The only reason why we can read it in such a good English is because the innumerable hours spent by these volunteers to produce the high quality translation this analysis deserves.

I strongly recommend that you all read this text very carefully.  Twice.  It is well worth it.

The Saker

That was the introduction to this essay that was posted on thesaker.is Internet site on Wednesday---and without doubt, it's the most important must read in today's column.  Please do yourself a favour and give it the time it deserves.

Pepe Escobar: Pakistan enters the New Silk Road

Now how do you top this as a geopolitical entrance? Eight JF-17 Thunder fighter jets escorting Chinese President Xi Jinping on board an Air China Boeing as he enters Pakistani air space. And these JF-17s are built as a China-Pakistan joint project.

Silk Road? Better yet; silk skyway.

Just to drive the point home – and into everyone’s homes – a little further, Xi penned a column widely distributed to Pakistani media before his first overseas trip in 2015.

He stressed, “We need to form a ‘1+4′ cooperation structure with the Economic Corridor at the center and the Gwadar Port, energy, infrastructure and industrial cooperation being the four key areas to drive development across Pakistan and deliver tangible benefits to its people.”

Quick translation: China is bringing Pakistan into the massive New Silk Road(s) project with a bang.

This must read article by Pepe was posted on the Asia Times website on Friday sometime---and it's the final offering in today's column from Roy Stephens.  I thank him on your behalf.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on this weeks release of current U.S. economic data, the Greek debt crisis and the Eurogroup meeting this weekend in Riga, the farce of high frequency trading and the lack of responsible regulation, and Swiss gold exports and global demand.

This 8:01 minute audio interview with host Geoff Rutherford was posted on the sprottmoney.com Internet site on Friday afternoon---and it' worth your while.

UBS' commodities team, bullish on gold, sees equities and gold driving up

This year credit conditions in the U.S. look to be worsening, possibly dramatically. Of that the National Association of Credit Management (NACM), which surveys credit companies in the US about debt, has become increasingly convinced. In February NACM warned of deteriorating conditions, though there was some question if the decline in its index was temporary.

But after March data, it decided it wasn’t a one off.”There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward,” NACM wrote in late march. “These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage. The data from the CMI is not the only place where this distress is showing up, but thus far, it may be the most profound.”

In a recent note UBS’ commodities team took this, among other factors, as a “flashing red” signal that credit conditions in the US have gone sour and that the US Federal Reserve will be forced back to loosening its belt again. As UBS has argued for some time, it sees this as making for a bull run in gold, and gold equities in particular.

As mild warning: UBS’ commodities team acknowledges that in its thinking on debt/gold it is at odds with consensus view on debt conditions in the US and the broader in house view at UBS. That is, that they are not dire. But the UBS’ commodities team argues the US economy is not as healthy as it may seem. It says, “broad US economy returns (over the cost of capital) are in structural and cyclical decline, credit appetite is deteriorating, and that will lead to a trend widening of spreads, deteriorating credit availability and uptake, slowing growth and a new round of Fed reflation.” Under these conditions it notes that gold and gold equities do well.

This commentary was posted on the moneyweb.com Internet site on Thursday morning---and it's something I found on the Sharps Pixley website.  The actual headline reads "Signs ‘flashing red’ on debt, Fed’s return".

Gold Is Near an All-Time Inflation-Adjusted Low -- Jeff Clark, Casey Research

Adjusted for the 1980 inflation measure, the gold price is approaching its bear market low of 2001. In fact, gold is now below the 1975 price when it became legal to own it again!

These data clearly show that when measured against a more realistic view of inflation, gold is dramatically undervalued.

And with total worldwide debt levels up by a whopping $57 trillion since the end of 2007, the need to own it is as important as ever.

Don’t worry about the current range bound price. Buying now represents tremendous value and tremendous protection against the next economic crisis.

Of course we all know why the gold price is that low, but there's not a word about it here.  This short commentary appeared on the Casey Research website yesterday---and it's worth your while.  Buy with both hands, dear reader!

Gold Newsletter's Brien Lundin: Gold market gets 'curiouser and curiouser'

"Curiouser and curiouser," cried Alice, in a statement that could be readily applied to today's gold trading session.

Granted, she was referring to talking rabbits and litigious queens, but that the dollar took a sizeable turn to the downside today, and gold followed it even further into the red, has to rank as a similarly fantastic occurrence.

The the dollar is down about 0.4 percent at last check, but June gold is down considerably more -- as much as 2 percent off from the day's highs for the yellow metal.

That's not an easy thing to do. Not only are the fiat dollar and gold at opposite ends of the philosophical spectrum, they are also at opposite ends of the mathematical see-saw: Since gold is priced in U.S. dollars, every tick down in the dollar against its trade partners puts an equal amount of pricing pressure on gold in the upward direction.

So there have to be some very powerful forces at work to push gold lower along with the dollar ... just as it takes a special situation to drive gold and the dollar upward in unison.

This must read commentary by Brien from his latest newsletter was posted in the clear in this GATA release yesterday.

Venezuela pawns nearly $1 billion in gold reserves

The Central Bank of Venezuela has pawned nearly $1 billion of its gold reserves, sources close to the central bank say. The swap operation, as it is called in the financial markets, was signed with the US bank Citibank, which was chosen from a group of five international organizations, which also aspired to structure this financial instrument.

Although details of the operation are unknown, experts have estimated that the U.S. bank will charge a fee of between 6 and 7 percent for preparing the swap. The gold remains in the vaults of the Bank of England. But it would be taken as collateral in case the Central Bank of Venezuela does not pay on time the amount borrowed from Citibank.

It was thought that the swap's value would be $1.5 billion, but in the end a lower figure was achieved. The funds will be used to pay for imports, an unofficial source said.

What's this gold doing at the Bank of England?  I thought they brought all their gold home years ago?  Obviously they had to move it if they wanted to do the swap.  This story, in Spanish, appeared on the el-nacional.com Internet site yesterday---and it's posted in the clear---and in English---at the gata.org Internet site.

Up to $1 trillion in gold is held by temples in India. Now Modi wants them to monetize this vast hidden wealth

Workers for the centuries-old Shree Siddhivinayak Temple here spent hours unpacking gold coins, heavy wedding necklaces and lustrous pendants from a closely guarded “strong room.” By the time gold-buyers began mingling with worshippers at the sweltering sanctuary on Tuesday, the jewelry auctioneers were ready.

“This is not a regular gold coin that you would buy from a gold shop — it contains the Lord’s blessing,” a temple board member said, holding up a tiny coin, probably left by a devotee years ago. It eventually sold for four times its face value.

Wealthy Hindu temples such as this one are repositories for much of the $1 trillion US worth of privately held gold in India — about 22,000 tons, according to an estimate from the World Gold Council. In 2011, one temple in south India was found to have more than $22 billion in gold hidden away in locked rooms rumoured to be filled with snakes. Another has enough gold to rival the riches stashed at the Vatican, experts said.

But little of it is contributing to the Indian economy, and now Prime Minister Narendra Modi’s government is looking to monetize India’s vast hidden wealth. In coming weeks, the government plans to begin a program that will allow temples to deposit their gold into banks to earn interest and circulate in the economy, rather than sit idle in musty vaults. The gold, officials said, would be melted down and sold to jewellers.

This very interesting story, which is partly what you already know, but there have been some developments since I last posted a story on this issue---and it's worth reading if you have the interest.  It originally appeared on The Washington Post website, but was picked up by the vancouversun.com Internet site yesterday---and I found it on the Sharps Pixley website.

Epoch Times: China uses gold to pursue global power

China's strategy in acquiring substantial amounts of gold, possibly as support for the inclusion of the country's currency in the Special Drawing Rights issued by the International Monetary Fund, is the topic of a report by Valentin Schmid in today's edition of The Epoch Times.

GATA secretary/treasurer Chris Powell is quoted about the longstanding recognition by the United States that whichever nation has the most gold can control its price and thereby control the value of all other currencies.

The Epoch Times' report is headlined "China Uses Gold to Pursue Global Power" and it was posted on the newspaper's Internet site yesterday.  It's definitely worth reading---and the photo alone is worth the trip.

How central banks mislead on gold reserve reporting -- Lawrence Williams

Since writing yesterday’s article on scepticism regarding central bank gold reporting (see: Does any nation hold the gold it says it does?), I have had my attention drawn to the publication by The Gold Anti Trust Action Committee (GATA) around 2 ½ years ago of a leaked IMF confidential document on central bank reporting of gold reserves.

I append the GATA article, with a link to the full IMF document, on this below and from it it can be seen how non-transparent such reporting has become – in the interests of protection of bank-sensitive data – when it comes to central banks hiding leasing and swap agreements for their gold in their overall reserve figures. This can, as my earlier article pointed out, mean that what is actually reported as being a nation’s physical gold reserve at a specific point in time may, in fact, be an extremely misleading figure given the amount of gold swap and leasing activity which may have been being undertaken.

Admittedly the IMF document referred to is now 16 years old, but there is no reason to believe reporting by the individual banks of their gold reserve figures to the IMF are any more transparent now than then – indeed they may even be less so.

This must read commentary by Lawrie, filed from London, appeared on the mineweb.com Internet site at 10:17 a.m. BST on Friday morning.

¤ The Funnies













¤ The Wrap

I also detect the continued presence of a single big buyer in Silver Eagles from the U.S. Mint due to the large but erratic pace of reported sales. Whereas the Mint has been reporting regular but very low sales of Gold Eagles relative to sales of Silver Eagles, in addition days can go by with no sales of Silver Eagles, but with reported sales of Gold Eagles. Particularly against a backdrop of weak retail sales, the spurts in reported sales of Silver Eagles is notable. As I’ve remarked previously, it’s as if the big buyer is waiting for the Mint to build up a few days of production before placing a big buy order, rather than buy what’s produced on a daily basis.

Also notable is that when one adjusts for the premium the Mint applies to Silver Eagles, more money is being spent on Silver Eagles than is being spent on Gold Eagles. Except for 2014, this had never occurred in the 29 year history of the Mint’s bullion coin program. Considering the low to almost non-existent collective investor sentiment towards silver, it is almost shocking that the Mint is selling more Silver Eagles relative to Gold Eagles than ever before, including 2014. - Silver analyst Ted Butler: 22 April 2015

Today's pop 'blast from the past' is the greatest hit of the Canadian-American hard rock band Steppenwolf.  The piece hit the airwaves in 1968---and needs no introduction at all.  The link is here.

Today's classical 'blast from the past' is one I've posted before, but I never tire of---and I hope you're of the same mind.  It's Max Bruch's Kol Nidrei Op.47.  This recording has been on youtube for a while, because it's in two parts, when it will easily fit in one video now.

But, having said that, the quality of the audio recording is luscious---and certainly the best one available on the Internet. I listened to the Maisky recording---and thought it too fast and I certainly didn't like his interpretation.  However, here is cello soloist Teodora Miteva, with the Vienna Philharmonic Women´s Orchestra at the St. Thekla Church in Vienna. Conducted by Izabella Shareyko.  This is as good a performance of this classical work as you'll hear anywhere by any soloist or orchestra.  It is divine---and that's probably the reason that it's had 464,000 hits, which is over the moon for any classical work. Enjoy---and the link to Part 1 is here---and the link to Part 2 is in the right sidebar.

Another day---and more slices.

As I've commented on before, the latest being in yesterday's column---and which Brien Lundin mentioned in the Critical Reads above---the downside price action in the precious metals in the face of a declining dollar index didn't happen without some help from JPMorgan et al.

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

Of course options and futures expiry for the May contract is early next week---and I'm sure that the HFT boyz were gunning for the stops held by the brain-dead technical funds in the Managed Money category---and it worked like a charm, as it always does.  It was just more proof positive the price of the precious metals is being set by two different sets of speculators---JPMorgan et al in the Commercial category---and the brain dead technical funds in the Managed Money category.

Nowhere to be found in this price-setting mechanism are the producers or the consumers---and if they are there, they represent a very tiny fraction of the current open interest in any of the precious metals, so supply/demand fundamentals are totally overridden by the powers-that-be.  The producers and consumers would show up in the Commercial category, but they were hijacked by the bullion banks years ago for price management purposes---and JPMorgan et al have been there ever since.

Ted says that silver is already back to where it was from a COT perspective five weeks ago---and any price declines since then---and we've had two in the last three days---will just be icing on the cake.

As Ted also mentioned on the phone yesterday---and I spoke of it in my COT comments further up, even with improvements in the Commercial net short position in gold since the Tuesday cut-off, he feels that there still could be 30,000 contracts worth of long liquidation left in gold in the Managed Money category.

But will "da boyz" press their advantage at this point?  If they do, they'll certainly use the opportunity to not only reduce their short positions in gold, but also continue to beat the living snot out of the silver price.  As Ted has been saying for decades now, silver is the critical metal---and JPMorgan won't hesitate to use gold as a hammer to beat it lower if they can.

That's probably the number one reason that Jamie Dimon has been so publicly bemoaning the takeover of Bear back in 2008.  He got stuck with their outrageous short position in silver that he just can't get out of---and that's why he's loaded to the gunwales in physical silver bullion.

The precious metal picture is crystal clear---except for those whose jobs depend on them not seeing it---that Jim Rickards was right in saying that these guys should be embarrassed by how obvious their price management scheme has now become.

I await the Sunday evening open in New York with great interest.

Before heading off to bed, I'd like to remind you again that Casey Research's own Louis James has been watching a company that he is convinced will be the world's next high-grade gold producer.

It’s an extremely well-funded operation working a high-grade gold deposit 8x richer than the average mine---and that’s scheduled to throw the switch on a brand-new mine and start producing gold for the very first time.

Up to this point, the market is largely ignoring it, so shares of this company are currently trading well below book.  This is your chance to invest in an advanced-stage producer at a dramatic discount... just before its true value is realized. But you must act before April 30.

That's First Notice Day for delivery into the May silver contract.

If you want to find out more, you can do so by clicking here.

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

See you on Tuesday.

Ed Steer

]]>
Sat, 25 Apr 2015 08:23:00 +0000
<![CDATA[Does Any Nation Hold the Gold it Says it Does?—Lawrence Williams]]> http://www.caseyresearch.com/gsd/edition/does-any-nation-hold-the-gold-it-says-it-does-lawrence-williams/ http://www.caseyresearch.com/gsd/edition/does-any-nation-hold-the-gold-it-says-it-does-lawrence-williams/#When:04:13:00Z "In a way, today's COT Report is already yesterday's news"

¤ Yesterday In Gold & Silver

Except for the spike low just after 9:30 a.m. Hong Kong time, the gold price traded mostly in a five dollar price band through all of Far East and London trading on their respective Thursday's.  Once the London p.m. gold "fix" was in, the price rallied a bit before getting sold down starting around 2:45 p.m. EDT in electronic trading.

The low and high ticks were reported by the crooks over at the CME Group as $1,183.60 and $1,197.40 in the June contract.

Gold finished the Thursday trading session at $1,193.50 spot, up $6.70 on the day---and would have obviously closed above $1,200 spot if the sellers of last resort hadn't shown up during the electronic trading session in New York.  Net volume was 112,000 contract, with 93 percent of that number trading in the current front month.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  The volume really began to pick up about 12:45 p.m. in London, when the rally that was underway at the time got turned over.  After that, heavier volume began to appear as the short sellers of last resort were on hand to provide "liquidity/price capping" against the new buying that was coming into the market.  You should also note that the price decline that started at 2:45 p.m. EDT was accomplished with very little volume.   The vertical gray line is 10:00 p.m. MST/midnight EST, so add two hours---and don't forget the 'click to enlarge' feature.

The silver price followed a similar pattern, but was much more subdued.  However, the inflection points all occurred at the same time as gold.  Silver's low came at the London p.m. fix---and not in morning trading in Hong Kong, as did gold's low.

The low and high were recorded as $15.705 and $15.92 in the May contract.

Silver finished the Thursday session in New York at $15.85 spot, up 9 whole cents.  Gross volume was very high, but once the roll-overs were netted it out, the volume was only 21,000 contracts.

The platinum and palladium prices traded similarly, with platinum closing at $1,134 spot, up 6 bucks on the day---and palladium closed at $753 spot, up 16 dollars on the day, recouping all of Wednesday's loss, plus a few dollars more.  Here are the charts.

The dollar index closed late Wednesday afternoon in New York at 98.06---and chopped higher from there, hitting its 98.40 high tick shortly after 8:30 a.m. BST in London.  The 97.15 low came at 2:30 p.m. EDT, which was about the time that gold began to get sold off in electronic trading in New York yesterday.  It rallied a bit from there---and closed at 97.31---down 75 basis points on the day.

Up until the 10 a.m. EDT London gold fix, there was absolutely no correlation allowed between the dollar index and the precious metal prices.  But the moment the dollar index bottomed out at 2:30 p.m. EDT---and then rallied a hair, there was a seller there to make sure that almost half of yesterday's gains in gold vanished before the close.

The gold stocks opened up a bit---and then rallied in a straight line until the not-for-profit seller showed up around 2:45 p.m. in the gold market---and sold the price down going into the close.  The equities followed suit, as the HUI finished the Thursday session up 2.42 percent.

The silver equities opened unchanged---and then sold down a bit, but reversed direction around 10:20 a.m. EDT.  They then followed an identical trajectory as the gold stocks---selling off at the same time was well, giving up about a percent of their gains in the last hour or so of the trading day.  As a result, Nick Laird's Intraday Silver Sentiment Index closed up only 1.60 percent.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  With only three delivery days left in the April contract, I find this lack of activity very strange.

The CME Preliminary Report for the Thursday session showed that gold open interest in April declined by 31 contract---and total o.i. left remaining is 440 contracts.  In silver, o.i. fell by 1 contract, leaving 22 left to deliver.

There were no reported changes in GLD yesterday---but there was a big deposit in SLV, as a chunky 1,912,276 troy ounces were deposited by an authorized participant.

Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the current data from the iShares.com Internet site---and this is what he had to report.

"Analysis of the 22 April 2015 bar list, and comparison to the previous week's list:  1,435,000.1 troy ounces were added (all to Brinks London)---and no bars were removed or had serial number changes."

"The bars added were from: Solar Applied Materials (0.7M oz), Russian State Refineries (0.6M oz), Yunnan Copper (0.1M oz), and 2 others."

"As of the time that the bar list was produced, it was overallocated 699.3 oz.  All daily changes are reflected on the bar list."

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

There was no in/out movement in gold at all at the COMEX-approved depositories on Wednesday---and not a lot of activity in silver, as only 5,772 troy ounces were reported received---and only 53,779 troy ounces were shipped out the door.  The link to the silver activity is here.

It was a another monster day over at the COMEX-approved gold kilobar depositories in Hong Kong on Wednesday.  Brink's, Inc. reported receiving 10,288 kilobars---and shipped out 8,100 kilobars.  One wonders if this level of hyperactivity is a permanent feature of this newly-created depository.  Time will tell, I suppose.  The link to the above activity in troy ounces is here.

Here are a couple of charts that Nick Laird passed around yesterday evening while I was working away on today's column---and I hope you find them as interesting as I did.  They show Switzerland's gold imports and exports for March.  Nick says that the export number to China would include Hong Kong's imports as well.  There's a story about this further down in the Critical Reads section.

I have a very decent number of stories for you today---and I will ruthlessly edit any further news items that come in over the remainder of Thursday evening.

¤ Critical Reads

Bankruptcies Suddenly Soar Across Corporate America, Worst Since Q1 - 2009

"Come down to Houston," William Snyder, leader of the Deloitte Corporate Restructuring Group, told Reuters. "You'll see there is just a stream of consultants and bankruptcy attorneys running around this town."

But it's not just in Houston or in the oil patch. It's in retail, healthcare, mining, finance. Bankruptcies are suddenly booming, after years of drought.

In the first quarter, 26 publicly traded corporations filed for bankruptcy, up from 11 at the same time last year, according to data from bankruptcydata.com. Six of these companies listed assets of over $1 billion, the most since Financial-Crisis year 2009. In total, they listed $34 billion in assets, the second highest for a first quarter since before the financial crisis, behind only the record $102 billion in 2009.

The largest bankruptcy was the casino operating company of Caesars Entertainment. Next in line were Doral Financial, security services firm Altegrity, RadioShack, and Allied Nevada Gold. The first oil-and-gas company showed up in sixth place: Quicksilver Resources. It joined privately owned natural-gas drillers in crushing their investors.

This very interesting article was posted on thestreet.com Internet site a week ago today---and I thank Casey Research's BIG GOLD editor Jeff Clark for sending it our way yesterday.

How 'Spoofing' Might Have Crashed the Market

Earlier this week a trader was arrested in London and accused of "spoofing." What's spoofing and what does it have to do 2010 flash crash? Bloomberg View's Matt Levine explains. (Levine is a Bloomberg View columnist. The opinions expressed are his own.)

Well, dear reader, if you want to know exactly how JPMorgan et al---along with their HFT buddies---rig silver and gold prices lower, all you have to do is watch this 1:19 minute video commentary posted on the Bloomberg website at 5:39 a.m. Denver time yesterday morning---and you'll have your answer.  I thank Dan Lazicki for sending it along---and it's an absolute must watch.  Ted Butler has something to say about this in the quote in The Wrap.

Initial Claims Worse Than Expected (Again), Remain Flat For 2015

For the second week in a row, initial claims were worse than expected and increased year-to-date, While still below the magic 300k levels, claims printed 295k against expectations of 288k confirming the stagnation of the job market since the end of QE3 and the government's fiscal year. California and New York saw the biggest rise in initial claims with only Illinois seeing a drop; notably Texas saw layoffs across various sectors, as it seems it is not as 'diverse' as Richard Fisher propagandized. After 4 straight weeks of decline, continuing claims rose this week by the most in almost 3 months (but remains close to 15 year lows).

This tiny Zero Hedge story, along with a most excellent chart, appeared on their Internet site at 8:38 a.m. Thursday morning EDT---and it's the second story in a row from Dan Lazicki.

New Home Sales Tumble by Most in Almost 2 Years as Northeast Crashes

After existing home sales sent stocks vertical on great news, so new home sales plunge has sent stocks vertical on bad news. An 11.1% drop MoM - the biggest since July 2013 - dragged new home sales back below 500k to 481k SAAR - the biggest miss in a year. Sales of new homes collapse 33.3% in The Northeast and The South saw new home sales crash 15.8%.

This is another brief Zero Hedge piece---and this one is courtesy of reader M.A.  It appeared on their website at 10:07 a.m. EDT yesterday---and the three embedded charts are definitely worth your while.

U.S. Manufacturing PMI Misses by Most on Record as New Orders Tumble

On the heels of weak PMIs from Europe and Asia, Markit's US Manufacturing PMI plunged to 54.2 in April (from 55.7). Against expectations of a rise to 55.6, this is the biggest miss on record. Of course, this is 'post-weather' so talking heads will need to find another excuse as New Orders declined for the first time since Nov 2014.

This Zero Hedge commentary from Thursday morning EDT is built around a Bloomberg story.  It---and the ZH piece---are both worth your time---and it's the second offering in a row from reader M.A.

Stockman: Global 'Mania' in Government Bonds is Veering Toward Disaster

The world's central banks have managed to brew up a "planet-wide mania" in government bonds that are trading at dangerous negative yields and could lead to a meltdown, according to David Stockman, White House budget chief in the Reagan administration.

Stockman said the level of complacency in world financial markets is "downright astounding — even stupid."

He cited data from BlackRock Investment Institute and Thomson Reuters that there are now $5.3 trillion in government bonds trading at negative yields, mostly in Europe, with already-low U.S. Treasury yield levels being pushed lower by the strength of the dollar.

"The central banks are just mechanically and blindly pushing on a string of monetary expansion that is levitating not the main street economy but only financial asset prices in the canyons of Wall Street," Stockman wrote on his Contra Corner blog.

This article showed up on the newsmax.com Internet site at 6:40 a.m. EDT on Thursday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

Marc Faber: 'Global Economy is Weakening'

The global economic picture isn't bright, and central banks are largely to blame, says Marc Faber, publisher of the Gloom, Boom & Doom Report.

"The global economy is not strengthening. It is weakening," he told CNBC. "China is weakening. The U.S. economic statistics recently have been on the weak side."

China's economy grew 7 percent in the first quarter, its worst showing in 6 years, and the Atlanta Federal Reserve's forecasting model shows growth of only 0.1 percent for U.S. GDP last quarter.

The Fed made a mistake in cutting short-term interest rates to almost zero, Faber argued. "The monetary policies as conducted by the Fed have created a lot of unaffordability in the system."

This is another story from the newsmax.com Internet site.  This one was posted there on Monday morning---and it's another story from Elliot Simon.

Oil slump may deepen as U.S. shale fights OPEC to a standstill

The U.S. shale industry has failed to crack as expected. North Sea oil drillers and high-cost producers off the coast of Africa are in dire straits, but America's "flexi-frackers" remain largely unruffled.

One starts to glimpse the extraordinary possibility that the U.S. oil industry could be the last one standing in a long and bitter price war for global market share, or may at least emerge as an energy superpower with greater political staying-power than OPEC.

It is 10 months since the global crude market buckled, turning into a full-blown rout in November when Saudi Arabia abandoned its role as the oil world's "Federal Reserve" and opted instead to drive out competitors.

If the purpose was to choke the U.S. "tight oil" industry before it becomes an existential threat - and to choke solar power in the process - it risks going badly awry, though perhaps they had no choice. "There was a strong expectation that the U.S. system would crash. It hasn't," said Atul Arya, from IHS.

This longish, but very interesting commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 8:59 p.m. BST in London on Wednesday evening---and it's the first contribution of the day from Roy Stephens.  It's worth reading if you have the interest.

These Two Assets---Coal and Oil---Shows Us That a Crash is Coming

If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality.

Put simply, a false “floor” was put under asset prices via fraud and funny money.  Consider the case of coal.

In the U.S., coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.

With that in mind, consider that coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market end… but coal has erased virtually ALL of the bull market’s gains (the green line represents the pre-bull market low).

This short, but must read article [courtesy of Phoenix Capital Research] showed up on the Zero Hedge website at 10:12 a.m. EDT on Thursday morning---and the charts alone are worth the trip.  It's the third offering of the day from reader M.A.

Deutsche Bank to pay record $2.5 billion to resolve LIBOR rigging

Deutsche Bank AG today was ordered to pay a record $2.5 billion fine and fire seven employees to settle U.S. and U.K. investigations into its role in manipulating Libor.

Deutsche Bank must terminate six London employees and one in Frankfurt who engaged in wrongful conduct, the New York Department of Financial Services said in a statement. The DFS didn't identify them by name and said one is a managing director, four are directors, and two are vice presidents.

"Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain," DFS Superintendent Benjamin Lawsky said in the statement. "We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals."

Of course that last statement is equally true about the precious metal market as well.  This news item appeared on the Bloomberg website at 6:00 a.m. Denver time yesterday morning---and I found it in a GATA release.

Greece's Piraeus Bank offers relief to poverty-stricken

Piraeus Bank will write off credit cards and retail loans up to €20,000---(US$21,484) for Greeks who qualify for help under a law the leftist government passed to provide relief to poverty-stricken borrowers, it said on Thursday.

Greece has received two E.U./IMF bailouts totalling €240 billion since it was hit by a debt crisis. The austerity programme imposed as a condition of the rescue has left one in four people out of work, and thousands struggling to pay debts.

The Syriza party was elected in January on a promise to end the belt-tightening. Its first legislative act was to pass a bill offering free food and electricity to thousands of struggling Greeks.

Piraeus said it would also write off interest on mortgages for qualifying borrowers, but did not provide details on how many people might benefit.

The above four paragraphs is all there is to this tiny Reuters article from Thursday morning EDT.  It was posted there at 9:56 a.m.---and I thank reader 'David in California' for finding it for us.

Bulgaria to build new $236mn ‘gas corridor’ with Romania and Greece

Bulgaria has reportedly inked a deal on a new “gas corridor” with Romania and Greece which will be completed in 2018, and is expected to cut the country’s almost total dependency on Russian natural gas.

The agreement on the $236.2 million link between Bulgaria, Romania and Greece, which is also known as a vertical gas corridor, has been signed by the energy ministers of the three countries in Sofia, the Wall Street Journal reported on Wednesday. Bulgaria will also be able to buy about 3-5 billion cubic meters of gas annually from Azerbaijan and from Greece’s liquefied natural gas terminals.

“We are finally getting a new source of gas because until now we were totally reliant on one source—Russia,” Bulgaria’s Deputy Energy Minister Zhecho Stankov was cited as saying by WSJ.

Bulgaria consumes about 3 billion cubic meters of natural gas, 95 percent of which is imported from Russia, and the majority of that comes through Ukraine which is seen as an unreliable transit country. It has been cut off from Russian supplies twice, in 2006 and 2009. Bulgaria has been seeking to diversify its gas supply by building interconnection links with neighbors.

This Russia Today story put in an appearance on their Internet site at 12:12 p.m. Moscow time on their Thursday afternoon, which was 5:12 a.m. EDT in Washington.

U.S. military instructors in eastern Ukraine combat zone – Russian military

The Russian Defense Ministry said the U.S. military instructors have been spotted in the combat zone in eastern Ukraine, training the country’s National Guard in the field, despite promises to hold the exercises at a remote range in Lvov.

Defense Ministry spokesman Major General Igor Konashenkov slammed Washington’s claims of increased presence of Russian air defense units in the Donetsk and Lugansk Regions of Ukraine as “astonishing in its incompetence,” TASS reported.

On Wednesday, U.S. State Department spokeswoman Marie Harf said that it’s currently “the highest amount of Russian air defense equipment in eastern Ukraine since August,” without providing any evidence to substantiate the claim.

Konashenkov explained that Harf’s statement was just an attempt to “warm up” the general public ahead of the NATO summit, scheduled to take place in Antalya, Turkey on May 13-14.

This Russia Today article was posted on their website at 5:52 p.m. Moscow time on Wednesday afternoon---and it's another offering from Roy Stephens.

Pepe Escobar -- Brzezinski Bye, Bye: Eurasia as the U.S. Knew it is Over Forever

Move over, Cold War 2.0. The real story, now and for the foreseeable future, in its myriad declinations, and of course, ruling out too many bumps in the road, is a new, integrated Eurasia forging ahead.

China’s immensely ambitious New Silk Road project will keep intersecting with the Russia-led Eurasia Economic Union (EEC). And that will be the day when the EU wakes up and finds a booming trade/commerce axis stretching from St. Petersburg to Shanghai. It’s always pertinent to remember that Vladimir Putin sold a similar, and even more encompassing, vision in Germany a few years ago – stretching from Lisbon to Vladivostok.

It will take time – and troubled times - but Eurasia’s radical face lift is inexorable. This implies an exceptionalist dream – the U.S. as Eurasia hegemon, something that still looked feasible at the turn of the millennium – fast dissolving right before anyone’s eyes.

This commentary by Pepe certainly falls into the absolute must read category, especially for all serious students of the New Great Game.  It appeared on the Asia Times website on Thursday sometime---and this particular iteration is posted on the russia-insider.com Internet site.  The first person through the door with it was South African reader B.V.---and I thank him for this.

Surreal! Sunset turns massive Chilean Calbuco volcanic eruption into amazing scene

The record-breaking volcanic eruption in southern Chile is dramatically altering skies, as spectacular views emerge of white plumes creeping miles up into the sky after coloring the night orange. A second blast took place hours ago.

Nature’s colossal power was aptly demonstrated by Calcubo, which erupted a second time just a few hours ago, with agencies reporting a stronger eruption than the first.

This extremely interesting news item, courtesy of Russia Today, was posted on their website at 9:02 a.m. Moscow time on their Thursday morning, but was updated at 2:05 a.m. Moscow time on their Friday morning with new photos and videos from the second eruption.  Several readers were kind enough to send me stories on this, but this is the best one---and I thank Roy Stephens for digging it up for us.  The last video clip is amazing.

Stricter anti-money laundering regulations derail gold trading in Belgium

"The Metals Focus team has just returned from a trip to Belgium. Our meetings and discussions with local players have confirmed that the local gold market has continued to suffer from stricter anti-money laundering measures that have been introduced in recent years.

"It is important to highlight the importance of the Belgian bullion market in Europe. Due to competitive prices being offered by local players, Belgium has for long been an active place of physical gold trading in Europe. This has been particularly the case during 2008-12 when the Belgian gold market witnessed a significant rise in volumes on both sides of the market. On the one hand, a surge in demand for physical gold across Europe in the aftermath of the financial crisis and the sovereign debt problem led to a rise in hand-carried purchases of gold bar and coins by the non-Belgian trade. On the other hand, a sharp rise in jewellery recycling in debt-ridden southern European countries saw an increasing amount of gold being shipped to Belgium for remelting.

"However, the size of the local market has shrunk considerably over the last couple of years, as the regulations on cash transaction payment became tighter .... Since April 2012, traders in Belgium have no longer been allowed to pay or be paid in cash for the trading of precious metals for an amount of €5,000 or more (€3,000 or more from the start of 2014), both in the case of a sale or a purchase of such metals. Prior to that, the upper limit for cash transactions was €15,000.

What the story doesn't say, dear reader, is that these are probably daily cash limits---and it wouldn't deter any serious buyer.  We have a $10,000 per day cash limit in Canada---and it's hardly ever an issue.  The cash rules we have at our store are far stricter than that.  It's $9,500 per person, per week.  I thank Casey Research's own Doug Hornig for passing this story around---and it was posted on the coinworld.com Internet site on Wednesday.

Sprott said planning unsolicited bid for Canadian metals trusts

Sprott Asset Management LP is planning to make an unsolicited offer to acquire Central GoldTrust and Silver Bullion Trust valued at $800 million, a person with knowledge of the matter said.

An offer at that level would reflect a 3.5 percent discount to the combined market value of the trusts at the close Wednesday of about $829 million. The proposal could come as early as today, said the person, who asked not to be identified because the information is private.

The trusts, which buy and hold substantially all of their assets in respective metals in bullion and certificates, have been under pressure from investor Polar Securities Inc., the Toronto-based hedge fund. Polar has been urging the trusts to change how unit holders can redeem their investment as a means of closing their trading gaps.

I've posted a few things about this already that Stephan Spicer sent our way.  Now here are the current developments in the main stream media.  This Bloomberg news item showed up on their website at 7:25 p.m. MDT on Wednesday evening---and it's a story I found on the gata.org Internet site.  It's worth skimming if it concerns you.

2014 FULL YEAR RESULTS: Top Primary Silver Miners Lost $1.9 Billion

With the last remaining company finally releasing their year-end results, my top primary silver miners lost a combined $1.9 billion in net income in 2014.  While two-thirds of the group reported significant write-downs (impairments),  two of the largest companies suffered the highest losses.

Even though the group experienced record net losses, seven of the twelve actually enjoyed positive adjusted income.  Let me explain.  Companies report net income and adjusted income.  Net income includes various items such as impairments, losses (or gains) on derivatives, hedges, investments or financial exchange losses (gains), and etc.

While these financial items are apart of their profit and loss statement, I like to focus on their adjusted income which removes these items in order to get a better idea of how successful they are at MINING SILVER.  As I mentioned before, two of the largest silver producers in the group suffered huge net income losses due to large impairments, but their adjusted income wasn’t as bad.

I'm certainly not prepared to vouch for the financial numbers that are reported in this silver-related story, but they should come as no surprise to anyone.  And even though every single primary silver miner knows that JPMorgan and Scotiabank are short the COMEX futures market in silver up the wazoo, they won't do a thing about it.  Why their senior shareholders stand for it is beyond me.  But it is what it is.  This article appeared on the srsroccoreport.com Internet site on Monday---and I thank reader U.D. for sending it our way yesterday.  It's worth reading.

Swiss gold exports show Asia buying more as investors sell bars

China and India helped buy up investors' biggest gold sales in more than a year.

Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March, the most among monthly data starting in January 2014, according to the Swiss Federal Customs Administration. Shipments to India more than doubled to 72.5 tons as imports from the U.K. climbed sixfold.

That's an indication that gold bars are leaving U.K. vaults for Switzerland, where they're refined and sent to Asia. India and China, the biggest buyers, boosted purchases in 2013 when investors dumped the metal amid the biggest price rout in three decades. Global sales from gold-backed funds totaled 55.7 tons in March, the most since 2013, data compiled by Bloomberg show.

"The big investor outflows from the U.K. via Switzerland to China and India are a continuation of the flow of metal from West to East," Matthew Turner, an analyst at Macquarie Group Ltd., said by phone from London. "Short-term, it is a sign of weakness, not of strength in the market."

I posted two of Nick's charts on Swiss gold imports and exports just before the Critical Reads section, so you wish to refresh your memory, you can check them out again.  This short Bloomberg story was posted on their Internet site at 3:55 a.m. Denver time on Thursday morning---and I found it embedded in another GATA release.  It's worth reading.

South African gold miners union plans to demand wage hikes of 75%

South Africa's National Union of Mineworkers is planning to submit demands to the gold sector next week calling for a 75-percent hike in the basic pay for entry-level workers, according to union sources familiar with the matter.

"For the basic wage at the entry level, we are planning to demand a raise to 10,000 rand ($823) a month in the first year from 5,700 rand at present," said a union source, who asked not to be named. This was confirmed by a second source in the union.

That would set the stage for tough negotiations and a potentially protracted dispute with companies in South Africa's gold sector, where profit margins are under pressure.

This gold-related news item put in an appearance on the Reuters website at 1:47 p.m. EDT yesterday afternoon---and it's another story that I found on the gata.org Internet site.

Alasdair Macleod: Gold, the SDR, and BRICS

If gold doesn't break into the Special Drawing Rights of the International Monetary Fund along with China's currency, the monetary metal might be incorporated into a similar international currency created by the New Development Bank, an institution being established by developing countries, GoldMoney research director Alasdair Macleod writes.

Macleod's analysis is headlined "Gold, the SDR, and BRICs"---and it appeared on the goldmoney.com Internet site yesterday.  It's worth reading as well.  Once again it's a gold-related story I found in a GATA release yesterday.

Lawrence Williams: Does any nation hold the gold it says it does?

Official central bank gold reserve figures as reported to the International Monetary Fund are at best unreliable---and at worst active deceptions concealing market interventions, Mineweb's Lawrence Williams acknowledged yesterday.

"China has 1,054.1 tonnes of gold in its official reserves. Yeah right! The USA has 8,133.5 tonnes in its reserves – the world’s largest. But forgive me if I treat this figure, and those reported by some other central banks, with about as much scepticism as I treat the official Chinese figure. Much is made of the fact that China has not updated its official reserve figure since 2009 – but then the US has not updated its figure for nearly 40 years. Something similar applies to many other central banks which report identical gold volumes year in, year out."

"It’s all a question of accounting and presentation of statistics. In truth the major central bank holders of gold only tell the IMF what they want the world to believe are their actual attributable gold holdings and the true amounts of accessible physical gold currently held on their own behalf are quite probably somewhat different in a number of cases."

This must read commentary by Lawrie showed up on the mineweb.com Internet site late Thursday morning London time---and it's another story I found in a GATA release, as I was sound asleep when it was first posted.

¤ The Funnies

¤ The Wrap

The big news event, of course, [was Tuesday's] joint filing of civil charges by the CFTC and criminal charges by the Justice Department against a London trader for his participation in the infamous “Flash Crash” in the stock market on May 6, 2010. That was when the Dow Jones Average fell 1,000 points in a very short period of time before recovering almost as sharply. Yesterday’s filing places much of the blame for the crash on this London trader who “spoofed” the market, by entering and immediately canceling large orders on stock index futures contracts whose prime intent was to manipulate prices. (I suppose he’s not the one spoofing prices lower in COMEX gold and silver today, Wednesday, but someone certainly is).

According to Eric Hunsader, from the market data company, Nanex, “I’m dumbfounded that they missed this until now.” After watching the agency’s handling of the increasingly obvious silver manipulation, I’m less surprised and I am left with the feeling that the evidence provided by the unnamed whistleblower must have been overwhelmingly convincing for the CFTC to change its tune so radically.

I am not at all surprised at the article’s negative portrayal of the role of the CME in this matter. The article quotes the London trader, in an e-mail more than four years ago, as having told the exchange who was inquiring into his activities, “to kiss my ass.” I’m sure that wasn’t what took the CME so long to crack down on the trader, since there is no evidence the CME ever cracked down on him. The CME hasn’t cracked down on High Frequency Trading, no matter how egregious it has become for the simple reason it is the greatest beneficiary of the mindless and manipulative trading in the form of exchange fees. The CME is the prime promoter of HFT. That’s the problem with self-regulation when the regulator is a beneficiary of the manipulative trading – it will never be ended by the conflicted regulator.

The irony, of course, with the charges of manipulation in the stock market that occurred five years ago is that the same manipulation is occurring in COMEX silver and gold today [Wednesday - Ed] as I write this. As I’ve written previously, the HFT computer jocks have been careful not to trip off another stock market crash because they know it will not be tolerated. But because both the CFTC and the CME have openly signaled that high speed computer manipulation is OK in COMEX silver and gold, the manipulative practice has actually intensified. Whereas crashing the stock market damages too many investors, the number of investors hurt in the silver manipulation is so small in comparison that the CFTC and the CME look the other way. Th at's the way these regulators swing – they only do what they are forced to do. - Silver analyst Ted Butler: 22 April 2015

I was happy to see that the precious metals rallied yesterday, but as I pointed out earlier, it had nothing whatsoever to do with what was going on in the currency markets, as the dollar index was in the dumpster during the whole time they were trading flat---and the only time that they were allowed to rally meaningfully was once the London p.m. gold fix was in.  They even capped those rallies in electronic trading in New York, so they were modest, at least in gold and silver---and that's being kind.

Gold made it to its 50-day moving average, but didn't close above it.  Silver hasn't been above its 50-day moving average for over two weeks, so there wasn't much damage done from a Commitment of Traders perspective.

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

And as I write paragraph, the London open is about fifteen minutes away.  Gold sold down a few dollars in Far East trading on their Friday, with the low over there coming at 1 p.m. Hong Kong time---and at the moment it has rallied a buck above unchanged.  Silver, platinum and palladium have erased their tiny losses as well during the last hour or so.

Net gold volume is 11,000 contracts, with 99.9 percent of that occurring in the current front month, so it's all of the HFT variety.  Net silver volume is around 2,700 contracts, with roll-overs out of the May contract in that metal about 25 percent of the gross volume.  The large traders have to be out of the May contract by the close of COMEX trading on Tuesday---and the rest by the COMEX close on Wednesday---and first day notice for delivery in May silver is Thursday.  All eyes should be on JPMorgan at that time.  Mine certainly will be.

The dollar index rallied to around 97.57 just before lunch in Hong Kong on their Friday morning---and began to slide from there.  It then did a 35+ basis point face plant about 2:15 p.m. Hong Kong time, about forty-five minutes before the London open.  It's sitting at 97.04 right now, down 27 basis points from Thursday's close in New York, but over 50 points off its Far East high.

Today at 3:30 p.m. EDT we get the latest COT Report from the CFTC's website for positions held at the close of COMEX trading on Tuesday---and as I said yesterday, gold is a tough call.  I'd guess that we'll see some deterioration because of the upward penetration of the 50-day moving average during the reporting week, but I wouldn't bet the ranch on that.  Silver is much easier, as there will be further improvement in the Commercial net short position in that metal, as prices are down on the week.  And as I also said yesterday, it's too bad that Wednesday's price action won't be in it, as we would have substantial improvements in both metals---so in a way, today's COT Report is already yesterday's news.  I'll have all the details tomorrow.

And as I hit the 'send' button on today's column at 5:10 a.m. EDT, I see that with the exception of palladium, which is only up two bucks at the moment, the other three precious metals are now down a bit on the day even though the dollar index is 38 basis points lower at the moment---and was down over 50 earlier.  Net gold volume is around 19,500 contracts---and silver's net volume is at 3,600 contracts.  This is very light volume.

Here's the 1-year dollar index chart---and it's current as of 5:10 a.m. EDT this morning---and it certainly looks toppy to me.  But so far, the powers-that-be have not allowed precious metal prices to reflect the decline of the last few weeks---and it remains to be seen how the dollar/gold ratio unfolds if this dollar decline really develops some legs.

As to what may happen during the rest of the Friday session, I haven't a clue---although I'm somewhat apprehensive because of the punk price action on the big drop in the dollar index, the second one in as many days.   And as I've pointed out on many occasions, we've still got a ways to go in both metals to the downside before JPMorgan et al can get maximum long and minimum short in all four precious metals, so nothing will surprise me, up or down, when I crawl out of bed later this morning.

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

Ed Steer

]]>
Fri, 24 Apr 2015 04:13:00 +0000
<![CDATA[BIS President in 1981: We’ve Got to Start Rigging the Gold Market]]> http://www.caseyresearch.com/gsd/edition/bis-president-in-1981-weve-got-to-start-rigging-the-gold-market/ http://www.caseyresearch.com/gsd/edition/bis-president-in-1981-weve-got-to-start-rigging-the-gold-market/#When:04:03:00Z "Another day---and more salami slicing---the same old, same old"

¤ Yesterday In Gold & Silver

Despite the fact that the dollar index got smoked in Far East trading for most of their Wednesday session, the gold price didn't react much to that fact, or wasn't allowed to---you pick.  The gold price continued to chop a few dollars around either side of unchanged until shortly before 1 p.m. in London trading.  The HFT boyz showed up ten minutes after the COMEX open---and then finished the job once the London p.m. gold "fix" was in, with the low coming just minutes before the London close, which was 11:00 a.m. EDT.  The subsequent rally didn't get far---and after the 1:30 p.m. COMEX close, it traded flat for the remainder of the Wednesday session.

The high and low ticks were reported by the CME Group as $1,204.40 and $1,185.00 in the June contract.

Gold finished the Wednesday trading day at $1,186.80 spot, down and even 15 dollars from Tuesday's close.  Net volume was pretty decent at 139,000 contracts.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  Midnight EDT/noon in Hong Kong is the vertical gray line at the 22:00 MDT mark.  You can see that the price/volume action that really mattered occurred between 6:30 and 9:00 a.m. Mountain Daylight time on this chart, with the big volume spike happening once the London p.m. fix was in and the HFT boyz spun their algorithms.  The rest really doesn't matter.  Don't forget to add two hours for EDT---and the 'click to enlarge' feature is a must.

With only one exception, the silver chart was a carbon copy of the gold chart---and the HFT boyz really smacked silver at the gold fix.  The low in silver came minutes before 10:30 a.m. in New York.  Gold's low came about thirty minutes later.

The high and low were reported as $16.075 and $15.655 in the May contract.

Silver finished the Wednesday trading session at $15.67 spot, down another 22 cents.  Net volume wasn't overly heavy, which I found surprising, as it was only  26,000 contracts, a thousand contracts more than on Tuesday.

Platinum's high came shortly after 8 a.m. in Hong Kong on their Wednesday morning---and it chopped ten bucks lower from there until the real selling began shortly before 2 p.m. Zurich time---and the same time as gold and silver got hit in London.  The HFT boyz peeled another ten bucks off the price going into the COMEX close---and it  traded ruler flat from here.  Platinum closed at $1,129 spot, down 19 bucks from Tuesday's close.

Ditto for palladium, except the selling in that metal was pretty much done by 1 p.m. EDT---and it traded flat in the 5:15 p.m. close of electronic trading as well.  Palladium got smoked for 23 dollars---and closed at $753 spot.

The dollar index closed late on Tuesday afternoon in New York at 97.99---and made it as high as 98.10 in the early going in Far East trading on their Wednesday morning.  It began to slide from there, with the 97.43 low coming just after 10:15 a.m. BST in London.  The subsequent rally made it back to within a basis point or two of unchanged by 11:00 a.m. EDT---and it chopped sideways from there into the close.  The index finished the day at 98.06---up 7 basis points.

As you can tell, there was absolute no correlation between the what the currencies were doing and what was going on in the precious metal market.

The gold stocks opened down a bit---and kept right on going, with the lows coming just before 2 p.m. EDT.  After that they didn't do much.  The HUI got hit for 3.63 percent.

It was just about as bad for the silver equities.  They opened down as well---and crashed to their low ticks minutes after 10:30 a.m. EDT.  They barely moved off their lows after that, as Nick Laird's Intraday Silver Sentiment Index closed down 3.06 percent.

The CME Daily Delivery Report showed that zero gold and 1 lonely silver contract was 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 April declined by 54 contracts---and that leaves 471 contracts still open.  Not surprisingly, the silver o.i. fell by the 150 contracts posted for delivery yesterday---and that will be delivered today.  There are 23 contracts still open in April.

There were no reported changes in GLD---and as of 9:32 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Over at Switzerland's Zürcher Kantonalbank for the week ending Friday, April 17---they reported increases in both their gold and silver ETFs for a change.  In gold they added 15,832 troy ounces---and in silver it was 68,360 troy ounces.

There was another sales report from the U.S. Mint yesterday.  They sold 3,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 30,000 silver eagles.

It was another very busy day in gold over at the COMEX-approved depositories on Tuesday, as 141,031 troy ounces were reported received---and only 100 troy ounces were shipped out.  Most of the gold deposited disappeared into the vaults of HSBC USA.  The link to that activity is here.

Silver activity was also very decent, as 631,802 troy ounces were received---and 555,071 were shipped out.  A bit over half the silver that was shipped out came out of JPMorgan's vault.  The link to that action is here.

Over at the COMEX-approved gold depositories in Hong Kong on Tuesday, Brink's, Inc. reported receiving 8,319 kilobars, but they also shipped out a chunky 14,759 kilobars.  That's big movement, dear reader.  The link to that activity in troy ounces is here.

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

¤ Critical Reads

McDonalds Reports Disturbing Numbers, Misses Across The Board; Stock Jumps

Moments ago McDonalds reported its latest sales numbers which were basically atrocious, worse than usual, and missed across the board. From BBG:

  • MCD MARCH TOTAL COMP SALES DOWN 3.3%, EST. DOWN 2.1%
  • MCD MARCH US COMP SALES DOWN 3.9%, EST. DOWN 3.0%
  • MCD MARCH EUROPE COMP SALES DOWN 2.9%, EST. DOWN 1.6%
  • MCD MARCH APMEA COMP SALES DOWN 7.3%, EST. DOWN 4.5%
  • APRIL GLOBAL COMPARABLE SALES ARE EXPECTED TO BE NEGATIVE

At this point the operational challenges facing the company are clearly unfixable in its current iteration which is broken beyond merely a CEO switch, and not even a "buy 1 Big Mac, get 3 Big Macs (and Joseph A Banc suits) free" strategy will fix the ailing fast food maker, whose secular collapse is best captured by the charts below.

This Zero Hedge article appeared on their Internet site at 8:42 a.m. EDT on Wednesday morning---and I thank reader M.A. for today's first story.

Flash crash arrest lays bare regulatory lapses at all levels -- starting with CME Group

CME Group Inc. concluded within four days of the 2010 flash crash that algorithmic trading on futures exchanges didn't exacerbate losses in the market.

When Washington regulators did a five-month autopsy in 2010 of the plunge that briefly erased almost $1 trillion from U.S. stock prices, they didn't even consider whether it was caused by individuals manipulating the market with fake orders.

Their analysis was upended Tuesday with the arrest of Navinder Singh Sarao -- a U.K.-based trader accused by U.S. authorities of abusive algorithmic trading dating back to 2009. Even that action was spurred not by regulators' own analysis but by that of a whistle-blower who studied the crash, according to Shayne Stevenson, a Seattle lawyer representing the person who reported the conduct.

Regulators were aware of Sarao's trading behavior as early as 2009, when officials at CME -- which runs the exchange where Sarao allegedly placed his problematic trades -- spotted him placing and then canceling large numbers of orders, and warned him against placing deceitful trades, according to an FBI affidavit. Sarao continued to manipulate markets through March 2014, the FBI said.

"How this continued for six years when the CME appeared to know about, it kind of boggles my mind," Dave Lauer, president of Kor Group, a lobbying and research firm, said by phone. "This is about as simple and easy as you can get, and it took them this long to do anything about it."

This is the same CME Group that's aiding and abetting JPMorgan et al in their precious metal price management scheme, particularly in silver.  This must read Bloomberg story showed up on their website at 1:24 p.m. EDT yesterday afternoon---and I found it in a GATA release.

JPMorgan Chase Bans Storage of Cash in its Safety Deposit Boxes

Some JPMorgan Chase customers are receiving letters informing them that the bank will no longer allow cash to be stored in safety deposit boxes.

The content of a post over on the Collectors Universe message board suggests that we may be about to see a resurgence of the old fashioned method of stuffing bank notes under the mattress.

My mother has a SDB at a Chase branch with one of my siblings as co-signers. Last week they got a letter outlining a number of changes to the lease agreement, including this:

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

Another change is that signatures will no longer be accepted to access the box. The next time they go in they have to bring two forms of ID and they will be issued a four-digit pin number that will be used to access the box then and in the future.

The letter, entitled “Updated Safe Deposit Box Lease Agreement,” was sent out to customers at the beginning of the month.

Well, dear reader, the reason that I'm posting this story is because TD/Canada Trust here in Edmonton just advised me of the same thing, so take this as sign of things to come.  This news item appeared on the infowars.com Internet site on Wednesday sometime---and I thank Brad Robertson for sharing it with us.

Patriot Act extension bill introduced by Senator McConnell

Senate Majority Leader Mitch McConnell,  introduced a bill Tuesday to extend the controversial Patriot Act and its surveillance provisions until 2020.

The extension would allow the National Security Agency to continue to collect data of millions on U.S. phone records daily. The NSA does so under the authority of Section 215, which allows for secret court orders to collect "tangible things" that could be used by the government in investigations.

The Patriot Act was enacted after the September 11 attacks to combat terrorism. McConnell used a Senate rule that will take the bill's extension straight to the floor for voting, a move that would bypass traditional committee vetting process.

Section 215 expires on June 1. The NSA's mass collection program was revealed by former contractor Edward Snowden, sparking a debate about privacy, security and the reach of government surveillance.

This UPI news item was posted on their Internet site at 9:34 a.m. EDT yesterday morning---and it's courtesy of Roy Stephens.

Securing Your Assets When Financial Privacy Is Dead

Daily Bell: Hi, Nick. It’s a pleasure to have another opportunity to speak with you. Last time we interviewed you, you dug into the U.S. government’s new FATCA rules and how they will impact Americans who invest outside the country. At InternationalMan.com, you often deal with the broad topic of privacy. Do you truly believe that Western governments have embarked on a coordinated attack on the private lives of their citizens?

Nick Giambruno: Not only have they embarked, but they have succeeded in killing off financial privacy. But before we go into details of why I say that, it’s important to identify the countries that are and are not responsible for this push, as it gives a clue to the motive. You never hear of financially sound countries, like Switzerland, Singapore, or Hong Kong advocating privacy-killing measures like FATCA. You never hear their governments denouncing the supposed “danger” of tax havens. It’s only the bankrupt states drowning in debt—like the U.S., France, and the U.K.—that have become hostile to privacy. The hostiles have won. Practically speaking, financial privacy is dead.

Given what has happened, it’s only prudent to assume that sooner or later all the details of your financial life will come to rest in a government computer—if they’re not sitting there already. You should plan accordingly. We live in a world where pretty much every penny you earn, save, and spend leaves a permanent record somewhere, and that can be retrieved for scrutiny by government employees at any time.

This interview appeared on the internationalman.com Internet site yesterday---and I thank senior editor Nick Giambruno for passing it around.

Deutsche Bank sets aside €1.5 billion as Libor settlement looms

Deutsche Bank will take a litigation charge of "approximately €1.5 billion," it said on Wednesday as the German lender nears settlement of claims that it tried to manipulate interbank lending rates.

A resolution of the long-running saga could come as early as Thursday, and the banks total fine is likely to be more than €2 billion, according to people familiar with the situation.

That total would represent the largest penalty meted out so far in connection with the scandal over the manipulation of the London interbank offered rate (Libor) and other interbank borrowing rates.

The above three paragraphs from this Financial Times story from Wednesday are all that were posted in the clear in this GATA release from yesterday---and I thank Chris Powell for posting it.

The Swiss Franc Is Plunging After Swiss National Bank Comments

As Bloomberg reports, Swiss National Bank says its reduced the group of sight deposit account holders that are exempt from negative rates.

Says negative rates to apply to sight deposit accounts held at SNB by enterprises associated with federal govt, including pension fund PUBLICA.

Accounts will have minimum exemption threshold of CHF10m, to which negative interest does not apply.

Accounts of cantons of Geneva and Zurich, City of Zurich to be wound up---and account of SNB pension fund will also be subject to negative rates.

This Zero Hedge article is definitely worth your while.  It appeared on their website at 8:33 a.m. EDT on Wednesday morning---and it's another offering from reader M.A.  There was also a Reuters story on this posted at the gata.org Internet site yesterday---and it's headlined "Swiss central bank reduces exemptions from negative interest rates".

Ukraine, in snub to Moscow, to adopt British war-time symbol, ditch Soviet war name

Ukraine, in a break with tradition that is certain to rile Moscow, is ditching the Soviet name for World War Two and aims to adopt the poppy, a mainly British wartime symbol, to mark the 70th anniversary of the victory over Nazi Germany.

The moves, signaled by Prime Minister Arseny Yatseniuk on Wednesday, marked an attempt by Kiev to distance itself from Moscow's Soviet-style celebrations, planned for May 9, as the conflict with Russian-backed separatists in eastern Ukraine drags on.

In another break with the Soviet past, Kiev will align its calendar with that of its European allies by adding for the first time May 8 - known in the West as Victory in Europe Day - as a national holiday.

A decree signed by President Petro Poroshenko fixed May 8 as a day for reconciliation between those Ukrainians who fought only the Nazis with those who, after the war, went on to fight Soviet rule also.

My goodness sakes alive, dear reader, how petty/childish can one get?  Of course sociopaths are like that---and I know quite a few.  So do you if you know the checklist for them.  This Reuters article, filed from Kiev, put in an appearance on the news.yahoo.com Internet site around 7 a.m. EDT yesterday morning---and I thank Jim Skinner for passing it around.

U.S. uses Ukraine crisis to derail Russia-Germany partnership – Lavrov

Washington’s strategy is to sow discord throughout the world to keep itself in the loop in every region, Russian Foreign Minister Sergey Lavrov told Russian media. The Ukrainian crisis was initiated to prevent an alliance between Russia and Germany.

“Strategically [the U.S.] don’t want to allow a situation in which important regions of the world live and prosper without them, without the Americans. That is why it is important for them to keep people dependent of them,” he said.

The assessment was voiced by Lavrov during a two-hour marathon Q&A session with three Russian radio stations: Echo of Moscow, Moscow Speaks and Sputnik Radio. They were represented by their respective chiefs, Aleksey Venedictov, Sergey Dorenko and Margarita Simonyan, who also heads Russia Today.

The Ukrainian crisis is used by the U.S. to derail Russia’s partnership with the E.U. and particularly Germany, Lavrov stressed.

This right-on-the-money Russia Today news item, which is definitely worth reading, showed up on their Internet site at 3:05 p.m. Moscow time on their Wednesday afternoon, which was 8:05 a.m. EDT in Washington.  It is, of course, courtesy of Roy Stephens.

Washington prepares for diplomatic war of attrition with Russia

The U.S. reportedly expects that the ongoing confrontation with Russia would continue until at least 2024 and involve many directions. Washington wants to rally support of its European allies to continue mounting pressure on Moscow.

The expected diplomatic and economic war of attrition is being outlined in a Russia policy review currently prepared by Celeste Wallander, special assistant to President Barack Obama and senior director for Russia and Eurasia on the National Security Council, reports Italian newspaper La Stampa. The publication said it learned details of the upcoming policy change from a preview that Washington sent to the Italian government to coordinate the future effort.

U.S. diplomats say Russia changed the cooperative stance it assumed after the collapse of the Soviet Union and is now using force to defend its national interests, the paper said. The change is attributed to the personality of Russian President Vladimir Putin, who, Washington expects, will remain in power until at least 2024.

This is the second story in a row from the Russia Today Internet site.  This one appeared there at 7:26 a.m. Moscow time on their Wednesday morning, which was 26 minutes after midnight in Washington.  It's also courtesy of Roy Stephens.

E.U. Effort to Punish Gazprom by Retroactive Antitrust Case Absurd – Expert

Ben Aris, editor in chief of Business New Europe magazine, says that the European Union's decision to serve Gazprom with a retroactive an anti-monopoly case is a foolish thing to do, adding that it seems to be a politically motivated decision.

Speaking to Radio Sputnik on Wednesday, Aris explained that while Gazprom's network of fixed pipelines makes it a natural monopoly, and that "from a business point of view, if you introduce new regulations, you can't turn around and implement them retroactively on contracts that were signed in compliance with existing regulations."

Aris noted that even if Gazprom "may have been charging economic rent for some of the gas deliveries…those deals were cut under existing regulations and European countries signed them, agreeing to the prices."

The expert explained that while "it's normal for governments to want to regulate natural monopolies…this should be done at the level of an intergovernmental agreement, rather than introducing legislation and then applying it retroactively."

This very interesting article put in an appearance on the sputniknews.com Internet site at 8:05 p.m. Moscow time yesterday evening---and it's also courtesy of Roy Stephens.

Putin, Hollande to discuss Ukraine, Middle East, Mistrals in Yerevan

Russian presidential aide Yuri Ushakov has confirmed that Russian President Vladimir Putin and French President Francois Hollande will meet during a visit to Armenia’s capital Yerevan on April 24. Ukraine will be one of the main themes in focus.

Also, presidents may discuss the situation in the Middle East and the delivery of Mistral amphibious assault ships to Russia.

"I proceed from the assumption that the theme of Mistrals may be raised during the talks in Yerevan. There are quite a few other issues for discussion, Ukraine in the first place," Ushakov said.

"It is very important for all parties to step up the implementation of the Minsk Accords," he said.

This news story, filed from Moscow yesterday, showed up on the tass.ru Internet site at 4:15 p.m. local time---and once again I thank Roy Stephens for finding it for us.  It's worth reading.

Russia Says No to One-World Government

Victor Olevich: Almost a quarter century has passed since the end of the Cold War. Yet, both Russia and the West once again find themselves at the precipice of a new Cold War. Why did Washington choose to pursue an aggressive foreign policy towards Moscow after the Soviet Union dissolved in 1991? Could these developments have been prevented?

William Lind: The Washington establishment, which is bipartisan, thought that now we could rule the world. It could dictate to everyone and it could force its ideology, which is sometimes called globalism or liberal democracy, but is in fact the soft totalitarianism of Brave New World, on everyone in the world. If necessary, with military force. This is the classic hubris that has destroyed one great power after another. There is nothing new about it.  

Victor Olevich:  Why has Washington chosen Ukraine as a battleground in its new Cold War against Russia?

William Lind: Russia under President Putin represents the state system and the way states normally act within the state system, based on their interests. The ideology of the Washington establishment says that is not how the world is going to work anymore.  It is instead going to be essentially a one world government based in Washington. This ideology includes such concepts as the feminist definition of women’s rights, devaluation of all religions, so called gay rights, and the belief that this must be universal.  Russia is saying no to this.  It is saying that it still believes in the state system and is going to pursue its own interests on the world stage.  So when Russia asserted its interests in the face of Ukraine threatening to join NATO, then Washington reacted very strongly.

This is the most important non-gold related commentary in today's column---and if you want to understand the world's power structure as it exists today, then it's definitely a must read.  It appeared on the russia-insider.com Internet site early Wednesday afternoon Moscow time---and it's also courtesy of Roy Stephens.

Morgan Stanley remains bearish on Gold for next 2 years

Greece’s uncertain future in the eurozone, global quantitative easing, loose monetary policies and continued demand out of Asia will all provide much needed support for the gold market, but these factors might not be enough to create another bull market, said Morgan Stanley in a snippet.

Analysts at Morgan Stanley expect prices to fall over the next two years as investors leave the marketplace.

“Our Global Cross Asset team highlight in their report that negative rates will continue to drive flow into USD credit, supporting both the house view of ongoing USD strength and our unchanged generally subdued gold price outlook,” analysts added.

This is the sort of drivel that passes for main stream thinking in the gold market---and I would be prepared to bet some serious coin that they are one of the Big 8 traders in the COMEX futures market that's short precious metals.  It was posted on the metal.com Internet site at 9:10 a.m. BST on Tuesday---and I found it on the Sharps Pixley website in the wee hours of yesterday morning.  I had it in lots of time for yesterday's column, but thought I'd save it for today.  Don't believe a word of it.

Chilean regulator seeks new sanctions against Barrick's Pascua-Lama

Chile's environmental regulator SMA said on Wednesday it will seek new sanctions against Barrick Gold Corp's massive Pascua-Lama gold and silver project, complicating the possibility that the suspended mine might resume construction.

The regulator already fined Barrick $16 million in May 2013 for not complying with some of the country's environmental requirements at Pascua-Lama, which was put on hold indefinitely in October 2013.

Inspections that took place between 2013 and 2015, some of which were scheduled and others triggered by complaints from the local community, had revealed 10 new infractions, the SMA said.

This short Reuters article put in an appearance on their website at 5:39 p.m. EDT yesterday---and it's another gold-related story I found on the gata.org Internet site.

No Such Thing As a Sure Thing—But Sometimes It’s Close: Louis James

In the investment world, there’s no such thing as a sure thing, and if anyone tells you they have such an investment, you should run the other way. Fast. But sometimes, the odds are so clearly stacked in one direction that it comes pretty close.

How can one be so sure? Due diligence, of course; the devil is in the details—and so is the profit.

It’s impossible to illustrate this without tooting my own horn a bit, so please bear with me on that. The point of the story is critical to investments in all sectors and should help you with your own.

My sector—my specialty—is mining. I’ve been kicking rocks around the world for more than a decade now, learning geology and engineering and metallurgy from world-class experts in their fields. But the point is to make money, not just to figure out nature’s geological puzzles, so I’ve also immersed myself in the world of legendary investors, learning all I can from their successes and failures.

The result is that I now have an encyclopedia of mineral exploration and exploitation projects in my head, as well as experience with thousands of companies in the field—and the outcomes of their efforts. This enables me to very quickly sort the wheat from the chaff.

This commentary by Casey Research's own Louis James appeared on the CR website yesterday sometime---and it's worth reading.

China’s Stealth Gold Reserves to Quadruple as IMF Seek Answers

Enter the Dragon.

China’s push to challenge U.S. dominance as the global economic superpower and to challenge the dollar as a global reserve currency involves gold – “a lot of gold.”

China may soon make public that it has quietly accumulated a massive hoard of gold in recent years. This was done in order to bolster their bid to have the yuan included in the basket of currencies that make up the IMF’s Special Drawing Rights (SDRs) according to an article by Bloomberg.

This is something Jim Rickards, ourselves and many analysts in the gold sector have said would happen for some time. The People’s Bank of China’s (PBOC) quiet ongoing accumulation of gold is something we frequently cover as we believe it is an important demand factor in the market that is largely ignored by most analysts and in most coverage of the gold market.

Everything in this commentary by Mark has already been posted in my column over the last couple of days, so there's nothing really new here.  But Mark looks at the stories through different eyes---and for that reason, his commentary on them is worth you while.  It was posted on the goldcore.com Internet site yesterday.

Downwards price manipulation of gold to Asian buyers’ big advantage -- Julian Phillips

It is felt by many that the gold markets are manipulated. The direction of this manipulation is downwards, or just to hold the gold price at current levels.  Certainly it appears that the banking system in the developed world is getting a big advantage in this. On the other side we have a most extraordinary picture. Chinese and Indian demand alone has in the last two years exceeded newly mined gold supplies. That’s around 3,300 tonnes. And Asia is getting it all, at prices down 37.5% from its peak level. Doesn’t this strike you as odd?

Demand such there has never been seen before emanating out of Asia, is not driving up prices? Instead they are getting all this gold at a deep discount? Who’s really getting the big advantage? Why should Asia want to see higher prices? When you can get the entire available stock that comes to the market at these prices, why chase prices?

As it is, more and more mines in South Africa and elsewhere in the world are being taken over by the Chinese. The production of these mines goes straight to China and not through the London and New York markets. It means the physical volumes of gold going through London and New York are shrinking but still enough to allow these markets to keep prices low.

This brief commentary by Julian appeared on Lawrie Williams' website yesterday---and it's certainly worth reading.

BIS president in 1981: We've got to start rigging the gold market

"Regulating the gold price in the free market" was recommended to central banks by the president of the Bank for International Settlements," Jelle Zijlstra, in a speech at International Monetary Fund headquarters in Washington in September 1981.

The speech, located this week by gold researcher and GATA consultant Ronan Manly, was given as a lecture memorializing the former managing director of the IMF, Per Jacobsson.

Those who follow GATA may recall that Zijlstra, who was president of the Netherlands Central Bank simultaneously with his holding office at the BIS, wrote in his memoirs in 1992 that the price of gold long had been held down by central banks at the behest of the United States, which sought to minimize competition for the dollar as the international reserve currency:

In his speech at the IMF in 1981, Ziljstra said: "I feel that it is necessary for us, within the Group of Ten and Switzerland, to consider ways to regulate the price of gold, admittedly within fairly broad limits, so as to create conditions permitting gold sales and purchases between central banks as an instrument for a more rational management and deployment of their reserves."

Ziljstra added: "On the occasion of the annual meeting of the IMF in Belgrade in 1979 this was brought up, but regrettably, insufficient agreement could be reached to make even a modest start with regulating the gold price in the free market. It is my conviction that relatively small-scale interventions, though not forestalling the subsequent explosion in the gold price, would at least have reduced it to more manageable proportions. Now that the turbulent emotions seem to have quieted down, we would be wise to reflect anew and without prejudice on these subjects."

This absolute must read GATA release appeared on their website yesterday.

¤ The Funnies









¤ The Wrap

[Last] Wednesday, I commented that the COMEX is artificially setting the price of silver and gold by means of a purely private betting game (aka bucket shop) comprised exclusively of speculators with no real producer or consumer participation. I attempted to prove this by pointing out that the Managed Money category accounts for 90% of contract position change on both price declines and increases. Since Managed Money traders are defined by the CFTC and the exchange as being pure speculators (as opposed to legitimate hedgers) there can be little doubt that they are just that – speculators. And the same can be said of the financial institutions trading against the managed money traders; since no legitimate producers (miners) or users are involved in the game, the commercial traders are also nothing more than speculators.

I hope you recognize that the 90% figure of all positioning is a very conservative estimate on my part, when it comes to typical managed money participation. In fact, the percentage is, at times, much greater than 100%. In recapping last week’s COT Report and compared to their commercial counterparties, the Managed Money traders in gold accounted for 160% of commercial positioning (7,600 contracts vs. 4,700 commercial contracts) and in silver, the managed money traders accounted for 130% of commercial positioning (8,600 contracts vs. 6,600 commercial net contracts). I’d like to see someone from the CFTC or the CME Group try to explain how this wasn’t proof of manipulation on its face, but neither appear to be forthcoming on any serious market matter. - Silver analyst Ted Butler: 18 April 2015

Another day---and more salami slicing---the same old, same old.

Taking another look at the gold and silver charts, it's easy to see that we still have 40 dollars or so to go in gold---and about 50 cents in silver at the most to get back to where we were about five weeks ago.

Of course, it's never the price that matters.  As Ted Butler continually points out, it's the number of long contracts that JPMorgan et al can get the technical funds in the Managed Money category to sell---and then how much they can get them loaded up on the short side on top of that.  When those two numbers are reached in both gold and silver, the bottom will be in---and we're not there yet.

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

Of course outside circumstance may intervene at some point---and we could get rallies regardless, but at the moment one must assume that nothing has changed in the short to medium term---and that "da boyz" and their algorithms are still the masters  of the precious metal market.

And as I type this paragraph, the London open is about ten minutes away.  Gold hit a new low for this move down shortly before 10 a.m. Hong Kong time on their Thursday morning.  The metal rallied above unchanged for a while, but has begun to head lower in the last hour of trading.  The silver price hasn't done much at all during Thursday trading in the Far East---and is basically unchanged from it's Wednesday close in New York.   Platinum and palladium have been chopping around unchanged as well.

Gold's net volume is getting very close to the 20,000 contract mark---and 99.9 percent of it is in the current front month, so it's all of the HFT variety.  Silver's net volume is at the 2,400 contract mark, with very decent roll-over volume.  The dollar index is chopping higher---and is currently up 13 basis points.

It's unfortunate that yesterday's trading volume won't be included in tomorrow's Commitment of Traders Report as there certainly was improvement in the Commercial net short positions in both silver and gold.  This would be especially true in gold, as JPMorgan et al closed it well below its 50-day moving average---and back below $1,200 spot.

And as I send today's effort out the door at 5:20 a.m. EDT, I see that gold and silver aren't doing much, or aren't being allowed to do much, although silver is up about a dime at the moment.  Both platinum and palladium set minor new lows for this move down---and are trading about unchanged.

Gold's net volume is at 29,500 contracts, which is pretty heavy for such tiny moves in the gold price, so it appears that whatever rally attempts are being made, the price is not being allowed to get far.  Silver's net volume is around 4,500 contracts---and a decent amount is roll-overs out of the May contract.  The dollar index, which had been up earlier, is now down a hair.

I'm done for another day.  It remains to be seen how the rest of the Thursday trading session turns out.  It appears that despite what the dollar index is doing, the precious metal prices are being totally controlled by JPMorgan et al in the COMEX futures market---and unless something comes out of left field, I expect that the current trend will continue.

See you tomorrow,

Ed Steer

]]>
Thu, 23 Apr 2015 04:03:00 +0000
<![CDATA[Luxury Apartments and Contemporary Art, Store Wealth Better Than Gold—Larry Fink]]> http://www.caseyresearch.com/gsd/edition/luxury-apartments-and-contemporary-art-store-wealth-better-than-gold-larry-fink/ http://www.caseyresearch.com/gsd/edition/luxury-apartments-and-contemporary-art-store-wealth-better-than-gold-larry-fink/#When:04:11:00Z "Any significant rally will be met by the usual phalanx of not-for-profit sellers"

¤ Yesterday In Gold & Silver

The gold price didn't do much in Far East trading session on their Tuesday.  It began to rally starting around 8:30 a.m. BST in London---and that happy state of affairs lasted until 1:00 p.m. BST.  The rally got capped at that point---and JPMorgan et al finished the job twenty minutes later when the COMEX opened.  The New York low came at the London p.m. gold fix---and it rallied from there until around 12:45 p.m.---and that was it for the day.

The gold price traded within a ten dollar range yesterday, so I shall dispense with the high and low ticks, although gold managed to close back above the $1,200 spot mark, but only by a buck or so.

The gold price ended the Tuesday session at $1,201.80 spot, up an even 6 dollars from Monday's close.  Net volume was pretty light at only 97,000 contracts---and well over 90 percent of it was in the current front month, so it was mostly the HFT boyz keeping the price in check.

It was almost the same chart pattern in silver---and you don't need me, or anyone else offering you analysis, as you've seen it all before.

The high and low ticks were reported by the CME Group as $16.165 and $15.86 in the May contract.

Silver finished the day at $15.98 spot, up 4 cents from Monday's close.  Gross volume was huge, but it netted out to only 25,000 contracts, as the roll-overs out of the May contract are well under way.

If you've seen that platinum chart before, it's because it's almost a carbon copy of the gold and silver charts posted above.  Platinum closed at $1,148 spot, up two bucks on the day.

The palladium chart was a mere shadow of the platinum chart---and that white metal was closed at $766 spot, down five dollars from Monday.

The dollar index closed late on Monday afternoon in New York at 97.90---and didn't do much until shortly after 1 p.m. Hong Kong time.  Then away it went to the upside, topping out at 98.45 at 8:30 a.m. in London trading.  It was mostly down hill from there into the 97.67 low that came about 12:15 p.m. EDT in New York.  From that point it rallied up to the 98.00 mark shortly after 2 p.m.---and traded a hair under it for the remainder of the Tuesday session.  The dollar index closed at 97.99---up 9 basis points from Monday's close.

The gold stocks opened unchanged---and hit their lows of the day about two minutes after that.  From that point they chopped higher until they topped out just before 1 p.m. EDT, which was the end of the rally in New York.  From there they gave back some of their gains going into the close.  The HUI finished up 0.88 percent, which is certainly better than the alternative.

I wish I could say nice things about the silver equities, but can't---as they remained firmly underwater all day long.  And even though silver closed in positive territory, the equities finished lower, as Nick Laird's Intraday Silver Sentiment Index closed down 1.02 percent.

On Monday, silver closed down 28.5 cents, but their corresponding equities closed up on the day.  Go figure.

Here's Nick Laird's long-term Silver 7 Index---and as you can see, we're barely off last November's low---and it would take a 300 percent increase in this index to get us back to where we were on the Friday before the JPMorgan-sponsored drive-by shooting on May 1, 2011.

You'd think that the silver miners would show some interest in what happened to the price way back then---and even now.  But, as you already know dear reader, you would be wrong about that.  Only First Majestic Silver has raised a finger or two---but that's as far as they've gone.

The CME Daily Delivery Report showed that 54 gold and 150 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  HSBC USA was the biggest short/issuer in gold with 52 contracts.  Canada's Scotiabank stopped 28 of them---and JPMorgan stopped 26 in its in-house [proprietary] trading account.  HSBC USA was the only short/issuer in silver---and Canada's Scotiabank stopped 144 of them.  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, not surprisingly, dropped by a further 661 contracts---and is now down to 525 contracts still open in the April delivery month, minus the 54 contracts posted above, of course.  In silver, April o.i. increased by one contract to 173, but from that amount, the 150 contracts posted for delivery tomorrow must be netted out---and that will be reflected in tomorrow's preliminary report.

There was another very decent deposit in GLD yesterday, as an authorized participant added 105,534 troy ounces.  And as of 9:44 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was also a decent sales report from the U.S. Mint as well.  They sold 3,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and another 482,000 silver eagles.

It was a pretty busy day in gold over at the COMEX-approved depositories on Monday, as they reported receiving 31,982 troy ounces---and shipped out a chunky 118,024 troy ounces.  The big receipt was at HSBC USA---and the big withdrawal was from Canada's Scotiabank.  The link to that activity is here.

In silver, nothing was reported received---and 468,850 troy ounces were shipped out.  Most of the out activity was at Brink's, Inc.---and the rest was from Canada's Scotiabank.  The link to that action is here.

Over at the COMEX-approved depositories in Hong Kong they continued to add to their gold kilobar stocks at a frantic pace.  At the Brink's Inc. depository on Monday they added 3,699 kilobars---and shipped out only 375 kilobars.  This depository has only been open about a month---and they're already at 19,579 kilobars, or 1.27 million troy ounces.  The link to Monday's activity in troy ounces is here.

Here's a newly-minted chart courtesy of Nick last night that he was kind enough to churn out on a moments notice at my request---and it shows the activity at the Brink's Hong Kong depository since it's inception last month.

Here's a chart the Dan Lazicki "borrowed" from the bullionstar.com Internet site---and it speaks volumes about the value of paper/plastic money vs. physical gold bullion.  It shows how many grams, or fractions of grams, a single U.S. dollar bill would purchase from January 1, 1968---up until January 1, 1980.  At its maximum in 1970, a greenback would have bought about 0.90 grams.  In 1980 it was down to 0.06 grams per dollar.  In 2015 dollars, it would be a tiny fraction of 0.06 grams.

I got an e-mail from Joshua Gibbons yesterday evening---and as you know, he's been on Kitco's case about their pool accounts---and he has updated his website in that regard---and it's definitely worth reading.  The link is here.

I don't have a lot of stories for you today---and I hope it stays that way as the evening progresses.

¤ Critical Reads

Fed still wants easy money and any rate increases will be trivial

Janet Yellen wants you to know that while the era of zero rates may be drawing to a close, money will stay cheap for a long time to come.

The Federal Reserve chair and her colleagues have stressed in recent speeches that monetary policy will remain unusually easy after they begin to tighten this year for the first time in almost a decade. They are telling investors that the pace of increases is more important than the liftoff date.

"This should be the slowest tightening cycle since the funds rate became the policy instrument of choice" in 1982, said Roberto Perli, a former Fed official who is now a partner at Cornerstone Macro LLC in Washington.

Policy makers have ruled out an increase at the next meeting of the Federal Open Market Committee, April 28-29. New York Fed President William C. Dudley stressed on Monday that once they start to lift rates above zero, "we will simply be moving from an extremely accommodative monetary policy to one that is only slightly less so."

This Bloomberg news item appeared on their Internet site at 10:00 p.m. Denver time on Monday evening---and I found it embedded in a GATA release.

Fed's Bill Dudley is alert to global liquidity storm, yet signals 3.5pc rates

The U.S. Federal Reserve will do its best to avert a bloodbath for emerging markets as it prepares to raise interest rates for the first time in eight years, but warned that it cannot let inflationary pressures take hold in the U.S. itself.

Bill Dudley, head of the powerful New York Fed, acknowledged that the institution has a special duty of care for the whole world, vowing to act with caution to soften a potentially brutal squeeze for borrowers holding record levels of dollar debt outside the U.S.

"The normalisation of U.S. monetary policy could create significant challenges for those emerging market economies that have been the recipients of large capital inflows in recent years," he said.

"We at the Fed take the potential international implications of our policies seriously. In part, this is out of simple self-interest, since the international effects of Fed policies can spill back onto the U.S. economy and financial markets. In part, too, it reflects a sense of special responsibility we have given the dollar’s role as the international reserve currency."

This commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 7:37 p.m. BST on Monday evening, which was 2:37 p.m. EDT in Washington---and it's the first contribution of the day from Roy Stephens.

Chatty Former Chairs Turn Up Fed Policy Noise

Paul Volcker is the latest former Federal Reserve chairman to chime in on central bank policy.

Mr. Volcker on Monday lamented the Fed’s large balance sheet, which grew rapidly after the 2008 financial crisis when Ben Bernanke was chairman and Janet Yellen was vice chairwoman. The Fed’s portfolio of assets grew to around $4.5 trillion from less than $1 trillion in recent years through three rounds of bond-buying aimed at spurring stronger economic growth.

“The Federal Reserve should not be so dominant in the markets,” Mr. Volcker told The Wall Street Journal after a press conference detailing his recommendations for financial regulatory reform.

His comments come less than a week after Mr. Bernanke suggested in his blog that the Fed should consider maintaining a large balance sheet. “I wonder if the case for keeping the balance sheet somewhat larger than before the crisis has been adequately explored,” he said.

This worthwhile commentary put in an appearance on the blogs.wsj.com Internet site on Monday afternoon EDT---and I found it yesterday's edition of the King Report.

Harley Davidson's new warning resonates with a lot of America's biggest companies

When iconic motorcycle maker Harley-Davidson Inc warned on Tuesday that discounting from foreign rivals would dent its profits, the message resonated beyond the motorcycle business.

From cars to construction equipment, the impact of the strong dollar is a big problem for U.S. companies selling overseas. But the U.S. dollar's recent surge to multi-year highs against major currencies, such as the euro and yen, has also become a challenge to their efforts to protect market share on home turf.

Harley's U.S. market share slipped nearly five percentage points in the first quarter to 51.3 percent as competitors offered discounts of up to $3,000 per bike and slashed suggested retail prices by up to 25 percent.

Honda Motor Co Ltd and Suzuki Motor Corp both currently offer $1,000 cash back on selected models.

This Reuters new item, filed from Chicago, appeared on the businessinsider.com Internet site at 6:57 p.m. CDT yesterday evening---and I thank Roy Stephens for sliding it into my in-box just before 2 a.m. EDT this morning.

Is Berkshire Hathaway ‘too big to fail?’

U.K. regulators want Warren Buffet’s Berkshire Hathaway classified as ‘too big to fail.’ FOX Business Contributor Bob Rice breaks down what this means for the reinsurance business and your bottom line.

This 3:32 minute CNBC video interview is well worth your time---and it's the second offering of the day from Dan Lazicki.

Oil Drops After API Inventories Show Builds Accelerating Again

After last week's smaller than expected API and DOE inventories data (which was merely average when considering the massive build from the prior week), it appears the machines have realized that everything is not awesome again in the crude complex. For the 15th week in a row, inventories rose - this time by more than expected at 5.5mm bbl (against a 2.5mm bbl expectation). Crude prices are slipping lower.

This tiny Zero Hedge article appeared on their website at 4:38 p.m. EDT yesterday---and the three embedded charts are worth the trip.  I thank Dan Lazicki for this story as well.

CFTC Charges U.K. Resident Navinder Singh Sarao and His Company Nav Sarao Futures Limited PLC with Price Manipulation and Spoofing

Washington, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the unsealing of a civil enforcement action in the U.S. District Court for the Northern District of Illinois against Nav Sarao Futures Limited PLC (Sarao Futures) and Navinder Singh Sarao (Sarao) (collectively, Defendants).  The CFTC Complaint charges the Defendants with unlawfully manipulating, attempting to manipulate, and spoofing — all with regard to the E-mini S&P 500 near month futures contract (E-mini S&P). The Complaint had been filed under seal on April 17, 2015 and kept sealed until today’s arrest of Sarao by British authorities acting at the request of the U.S. Department of Justice (DOJ).  After the arrest, the DOJ unsealed its own criminal Complaint charging Sarao with substantively the same misconduct. 

The Standard & Poor’s 500 Index is an index of 500 stocks designed to be a leading indicator of U.S. equities.  The E-mini S&P 500 is a stock market index futures contract based on the Standard & Poor’s 500 Index and is one of the most popular and liquid equity index futures contracts in the world.  The contract is traded only at the Chicago Mercantile Exchange (CME). 

This press release was posted on the CFTC's website yesterday---and it's worth reading.  There was a brief 1:07 minute video clip about this on CNBC yesterday afternoon---and the headline there reads "U.K. trader charged for manipulation contributing to 2010 flash crash".  I thank Karen Nelson for bringing this story to our attention.  That paragon of virtue Bart Chilton had something to say about this as well in a 1:49 minute CNBC video clip headlined "Bart Chilton: Don't think charged trader 'sole culprit'"---and that was courtesy of Dan Lazicki.

This tiny European state may trigger a Grexit

Finland's rigid stance over euro zone bailouts could become even more hardline after the weekend's election, in what would be a further blow to beleaguered Greece as it tries to avert a default.

A parliamentary election on Sunday in the small, northern euro zone state was won by the opposition Centre Party's Juha Sipila.

He may have to rely on the euro-sceptic Finns Party for support to form a coalition government – a development that analysts say raises risks to the future of the euro area. The Finns Party is against sovereign bailouts and wants to boot Greece from the 19-member euro zone.

"Finland was in the anti-bailout camp before yesterday's election and it's now likely to take an even harder line towards Greece," Nicholas Spiro, managing director at Spiro Sovereign Strategy, told CNBC.

I had a story about his in yesterday's column, but it didn't reflect the outcome of the Finnish elections on Sunday.  This CNBC story from 6:03 p.m. EDT on Monday evening does that---and it's something that Roy Stephens sent our way on Tuesday morning.  He also dug up a Russia Today commentary from yesterday on this issue headlined "Finland: Exhibiting strain of northern independence".

Lenders Awash With Euros Pay Banks and Governments to Take Loans

Euros are so abundant thanks to Mario Draghi’s easy monetary policy that banks are starting to pay each other to get the cash off their balance sheets.

For the first time, an index of three-month interbank loans in euros fell below zero on Tuesday. Elsewhere, the Spanish government raised funding for the same period of time and got paid to take the money.

They’re the latest signs that the efforts by the European Central Bank President to get cash flowing into the economy are starting to percolate through markets. The plan is for the cheap money created by ECB bond purchases -- known as quantitative easing -- finally to boost growth and stave off deflation.

“It’s good news for borrowers, not so good news for lenders,” said Ciaran O’Hagan, the Paris-based head of European rates strategy at Societe Generale SA. “Mr. Draghi wants us to spend the cash. The purpose of QE is to get us to take on some risk.”

This Bloomberg article put in an appearance on their Internet site at 3:12 a.m. Denver time yesterday morning---and I thank West Virginia reader Elliot Simon for bringing it to our attention.

Greek bank shares slide to record low as ECB considers pulling the plug

Shares in Greece's stricken banks fell to an all-time low on Tuesday amid fears the European Central Bank was planning to finally pull the plug on the country's lenders.

Banks stocks fell by 4pc on the news that ECB staff had drawn up a memo which proposed limiting the emergency assistance (ELA) that has been keeping lenders alive since the Syriza-led government entered office at the end of January.

Tuesday's trading helped cap off a torrid run which has seen more than 50pc wiped off the value of Greece's lenders since the start of the year.

This news item showed up on The Telegraph's website at 6:00 p.m. BST yesterday evening---and It's another offering from Roy Stephens.

Hungary, Greece, Cyprus to Restart Food Trade With Russia Despite Sanctions

Hungary, Greece and Cyprus may soon be allowed to export fruit and vegetables to the Russian market, according to a report in the newspaper Rossiyskaya Gazeta.

Russian health authorities are conducting audits of suppliers in all three countries, as well as India, Alexey Alexeyenko, the director of Rosselkhoznadzor (the Russian Federal Service for Veterinary and Phytosanitary Surveillance) is quoted as saying.

"About 20 companies will be verified in Greece and Hungary. In India — less, around four to five. Cyprus has requested a delay for technical reasons and therefore, the audits will begin on April 27, where seven to eight companies will be checked."

Greek Prime Minister Alexis Tsipras met Russian President Vladimir Putin in Moscow in early April and it is understood agricultural trade was discussed.

This story appeared on the sputniknews.com website at 1:28 p.m. Moscow time on their Monday afternoon, which was 6:28 a.m. EDT in New York.  Once again I thank Roy Stephens for finding it for us.

19 Reasons Why You Should Never Visit Iran

No doubt you’ve heard a lot about Iran in the media. And it’s true, Iran is a truly evil and terrifying place. Here we present 19 reasons you should never, ever, visit this godforsaken land.

To tell you the truth, dear reader, two countries I'd love to spend some serious time in are Iran and neighbouring Turkey.  There's just so much history---and so much culture.  And I'd bet serious money that they people that live there are wonderful as well.  The pictures I would take!!!  This must read photo essay appeared on the pulptastic.com Internet site.  I thank Nitin Agrawal for passing it around yesterday.

Unprecedented development ahead for renminbi

The Bank of China's chief economist Cao Yuanzheng feels China's efforts to promote the renminbi (RMB) as an international currency is blazing a new trail in world history.

"I think this is an unprecedented process in economic history," Cao said in an exclusive interview with Xinhua on the sidelines of the "RMB: Going Global. The Bank of China Renminbi Internationalization Forum".

Renminbi development may be unprecedented but carefully mapped out nevertheless. In his remarks during the forum, Cao said the process has its roots back in the 1990s, and the veteran economist said he still believed it would take several more years for the level of international convertibility of the currency.

"I now think we can speak in terms of years and not decades," Cao said. "I cannot predict the time table, but I think we'll get there before 2020."

This news item, filed from Rome, appeared on the chinadaily.com.cn Internet site on Saturday---and I found embedded in an article posted on the tfmetalsreport.com Internet site via a GATA release yesterday.  It's worth reading.

Japan Breaks 48-Month Deficit Streak, Manages Marginal Trade Surplus on Collapse in Imports

After 48 months of trade deficits, March saw a very modest ¥3.3bn surplus (vs. a ¥409bn deficit expectation), driven by a collapse in imports. Exports rose 8.5% (as expected) but against already dismal expectations of a 12.6% drop, March saw Japanese imports crash by 14.5% - the most since Nov 2009 (driven by the plunge in oil prices - alleviating some of the post-Fukashima fuel demands cost). Of course this is terrible news for stocks as it means less stimulus from the BoJ...and the yen is strengthening modestly.

This is another tiny Zero Hedge story with three embedded charts.  It appeared on their Internet site at 8:05 p.m. EDT yesterday evening---and it's courtesy of Dan Lazicki.

Wall Street Has No Idea How Much Money Venezuela Has

Bond investors suspect the Venezuelan government is pretty low on cash. Just how low, though, is a tricky question.

After all, this is a country that has stopped releasing even the most basic economic data -- things like inflation and government spending -- on a timely basis.

Given how high the stakes are, with many investors bracing for an imminent default, Wall Street analysts are scrambling to fill the void. Firms including Bank of America Corp. and Barclays Plc have created their own statistical series to try to help investors understand how dire the country’s cash squeeze is. It’s a challenging exercise, they say.

This very interesting article showed up on the Bloomberg website at 7:56 p.m. MDT on Monday evening---and it's the second contribution of the day from Elliot Simon.  The original headline read "Wall Street is refusing to accept Venezuela's blackout of data".

N.Y. apartments, art store wealth better than gold now, BlackRock chairman says

Gold’s traditional role as a store of wealth has been usurped by contemporary art and apartments in cities such as New York and London, according to Laurence D. Fink, head of the world’s biggest asset manager.

“Historically gold was a great instrument for storing of wealth,” the chairman of BlackRock Inc. said at a conference in Singapore on Tuesday. “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted.”

Over the centuries, bullion traditionally lured demand as a protection of wealth during crises, including conflicts and periods of inflation. Prices posted the first back-to-back annual drop last year since 2000 as investor holdings in exchange-traded products contracted, global equities rallied and the dollar climbed on prospects for higher U.S. interest rates. Since peaking in 2011, it’s dropped about 38 percent.

“The two greatest stores of wealth internationally today is contemporary art….. and I don’t mean that as a joke, I mean that as a serious asset class,” said Fink. “And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

And as Chris Powell said in the preamble to this Bloomberg story in his GATA release---"If only someone had asked him why gold has lost its sheen. But that would have required actual journalism."  Amen to that bro!  This article showed up on their website at 11:48 Mountain Daylight Time on Monday evening.

Book tells of Germany's foreign-vaulted gold and the campaign to bring it home

A book chronicling the German gold repatriation campaign, written by its leader, Peter Boehringer, has just been published. It's titled "Holt Unser Gold Heim: Der Kampf um das Deutsche Staatsgold," which is roughly "Bring Our Gold Home: The Struggle over the German State's Gold."

In addition to the history of the gold repatriation movement, the book reviews the history of postwar Germany's vaulting much of its gold abroad and explains gold's crucial and enduring if unappreciated place in the world financial system.

This short GATA release was posted on their website on Tuesday afternoon EDT.

Currency Wars Back as Russia Buys One Million Ounces of Gold in March -- Mark O'Byrne

Russia increased its gold holdings by one million ounces in March, bringing its total reserves to nearly 40 million ounces or 1,238 metric tonnes. The Russian one million ounce gold purchase is a large one even by Russian standards as in recent years they have consistently been buying roughly 300,000 ounces per month.

It followed a two month break from the gold market which had led to erroneous speculation that Russia was not interested in increasing its gold reserves any further.

Since 2005, Russia’s gold reserves have increased three-fold. As a comparison, in the second quarter of 2009, Russia only had 550 tonnes of gold in its official reserves meaning that their reserves have doubled in recent years.

The 1 million ounce gold buy in March by The Central Bank of the Russian Federation was certainly in the news Monday and yesterday---and here's Mark's comments on it as posted on the goldcore.com Internet site yesterday.

Russian central bank gold buying back with a vengeance -- Lawrence Williams

According to a Russian central bank announcement on its latest gold reserve position it appears that it added 1 million ounces of gold (31.1 tonnes) to its holdings in March after a two month hiatus, bringing its total reserves to 39.8 million ounces (1,237.9 tonnes). There had been speculation that the nation had been cutting back on its gold purchases due to the economic difficulties it had appeared to face due to the falling oil price and western sanctions.  However the lack of any increase in the early months of the year is a pattern we have seen before – but now the March rise is the highest seen since last September when the bank added 1.2 million ounces (37.3 tonnes) which itself was the largest monthly total in 16 years. The big March gold reserve rise could thus be a signal that the Russian central bank is strongly back on its gold buying spree.

The news of the latest Russian gold reserve addition confirms the World Gold Council prediction that overall central bank gold reserve rises will continue at a strong rate this year – and there is also speculation by Bloomberg that China may also confirm a big rise in its reserve by as much as 2,500 tonnes or more in the months ahead as it jockeys to try and have the yuan accepted by the IMF as a part of the make-up of a revised Special Drawing Rights basket – although as we have pointed out here before this is something which could be vetoed by the U.S. as not being in its interest given its 16.75% blocking voting interest in significant IMF decisions.

This commentary by Lawrie on Russia's gold purchase was posted on the mineweb.com Internet site late yesterday morning in London---and it's worth reading as well.

¤ The Funnies













¤ The Wrap

Not only does the delivery data on the March futures contract confirm that JPMorgan took delivery of 1,500 COMEX contracts in their own account, the physical movement of metal, mostly from other COMEX silver warehouses, also confirms JPMorgan continues to acquire actual metal and plans to hold onto it in the most cost effective manner (no outside storage fees). I’ve been beating on the drums about JPMorgan accumulating physical silver for quite some time (long before the ironclad proof of the March deliveries occurred) and it occurs to me my estimates of what JPM may hold may be a bit out of date.

I’ve been speculating for some time (six months or longer) that JPMorgan had amassed upwards of 300 million oz of physical silver in all forms since April 2011 (mostly in the form of 1,000 oz bars, but also as much as 60 -70 million oz in Silver Eagles). It’s been my private estimate all along that JPM was continuing to pick up additional quantities of actual silver at the rate of 5 to 10 million oz a month. It would appear that JPMorgan exceeded the upper band recently, but my point is that due to the passage of time and the continuing evidence that the bank is still accumulating silver, I must up my estimate of their total holdings to 350 million oz or more. - Silver analyst Ted Butler: 18 April 2015

In a trading pattern which is more than familiar, the rallies in Far East and London trading were summarily dealt with once the COMEX session in New York began.  True, the rallies were capped twenty minutes before then, but the engineered price declines really began in earnest in New York trading.

Not that that it matters really, because it's just JPMorgan et al in London handing it off to JPMorgan et al in New York.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday---and there really wasn't much in the way of significant change.  However, that certainly wouldn't have been the case if "da boyz" hadn't been waiting in the wings as they were---like they are every day.

And as I write this paragraph, the London open is fifteen minutes away.  After selling down below the $1,200 spot mark in morning trading in the Far East on their Wednesday, the gold price began to rally a bit in early afternoon trading over there---and is back above the $1,200 spot price mark at the moment, plus it's a few dollars above its Tuesday close in New York as well.  The same can be said of the other three precious metals.

Net gold volume is just over 12,000 contracts---and there's a bit more roll-over volume so far today than there was this time on Monday.  Net silver volume is pretty light, around 2,500 contracts---and roll-over action is decent once again.

The dollar index, which made it up to 98.10 in mid-morning trading in Hong Kong, has now rolled over---and is about 35 basis points off its high, and down 21 basis points from Tuesday's close in New York.

Since yesterday was the cut-off for this Friday's Commitment of Traders Report, just a casual glance at the last five trading days, leaves me with the impression that there won't be much change in the Commercial net short position in gold.  However, since we're back above the 50-day moving average, albeit by a small amount, that may have changed things, so we'll have to wait and see.  Silver looks better---and hopefully the numbers will reflect that.

We're still quite some distance from wildly bullish---and as Ted Butler has stated on several occasions, market neutral would be closer to the mark, so prices could go in either direction.  However any significant rally will be met by the usual phalanx of not-for-profit sellers.

And as I send today's column out the door at 5:15 p.m. EDT, I note that the tiny rallies in all four precious metals didn't make it past the London open---and except for platinum, which is now down on the day, the other three precious metals are back to unchanged.

Net gold volume has doubled to 24,500 contracts---and silver's net volume is up to 4,100 contracts, which isn't a lot.  The dollar index is now down 46 basis points which, I suspect, is one of the reasons that JPMorgan et al are leaning on the precious metal prices at the moment.

How today will shape up as far as far as gold and silver are concerned is certainly an unknown, but it's obvious that "da boyz" are at battle stations at the moment.   And based on that, nothing will surprise me when I power up my computer later this morning.

See you tomorrow.

Ed Steer

]]>
Wed, 22 Apr 2015 04:11:00 +0000
<![CDATA[Russia’s Central Bank Buys 1 Million Ounces of Gold in March]]> http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchase-1-million-ounces-of-gold-in-march/ http://www.caseyresearch.com/gsd/edition/russias-central-bank-purchase-1-million-ounces-of-gold-in-march/#When:04:19:00Z "Another day---and more slices off the precious metal salamis"

¤ Yesterday In Gold & Silver

The gold price didn't do much, or wasn't allowed to do much---take your pick---in morning trading in the Far East on Monday.  The low tick over there came at 1 p.m. Hong Kong time.  From that point it rallied to its high tick at the 8:00 a.m. BST London open---and JPMorgan et al were waiting.  The low tick came about fifteen minutes before the London close.  The rally off the low got reversed at exactly 1:00 p.m. EDT and, starting shortly after the 1:30 p.m. COMEX close, the gold price rallied quietly into the 5:15 p.m. close of electronic trading.

The high and lows were recorded by the CME Group as $1,209.00 and $1,190.80 in the June contract.

Gold finished the Monday session in New York at $1,195.80 spot, down $7.50 from Friday's close---and safely back below the $1,200 spot price.  Net volume was pretty decent at 129,000 contracts.

Here's the 5-minute gold price/volume chart courtesy of Brad Robertson.  Midnight EDT Sunday night is the second vertical gray line.  It didn't require a lot of volume at the spike high at the London open to reverse the rally, as volume was very light to start with---01:00 Denver time on this chart.  Most of the volume came between 11 a.m. BST---and noon EDT, which is 05:00 to 10:00 a.m. MDT on this chart.  Add two hours for EDT---and the 'click to enlarge' works wonders here.

The silver price chart is similar, but it's interesting to see how the price got taken lower in stair-step fashion until the 10:45 a.m. EDT low tick.  Then, like gold, the silver price recovered a few pennies after the COMEX close.

The high and lows were reported as $16.34 and $15.82 in the May contract.

Silver closed yesterday at $15.94 spot, down 28.5 cents from Friday's close.  Net volume was pretty chunky at 37,500 contracts.

The price charts for platinum and palladium looked similar, except their respective lows came just before the equity markets opened in New York yesterday morning.  Platinum was closed at $1,146 spot, down 24 bucks.  Palladium finished the Monday session at $771 spot, down 11 dollars---and well off its low tick.  Here are the charts.

The dollar index closed late on Friday afternoon in New York at 97.45.  It gapped down a bit at the open, but then chopped more or less sideways until about 2:40 p.m. Hong Kong time.  From there it rallied up to its 98.07 high which came minutes before the 8:20 a.m. EDT COMEX open.  It dropped down to 97.71 by 11:15 a.m.---and then rallied a bit into the close.  The index finished the Monday session at 97.90---and up 45 basis points from Friday's close.

The gold stocks opened down---and hit their lows about 9:45 a.m. EDT.  They chopped higher---and back into positive territory---shortly before noon, before falling back into negative territory once again.  But starting shortly after 2 p.m. a rally ensued that took gold back to its high of the day---and that's pretty much where it closed.  The HUI finished the Monday session up 0.43 percent, which was quite remarkable considering how badly the gold price got smacked.

The silver equities followed a somewhat similar pattern---and they, too, actually closed in the green---as Nick Laird's Intraday Silver Sentiment Index closed up 0.33 percent.

The performance of the precious metal shares, especially the silver equities, is rather amazing considering how badly they got smoked last week on loses of 4 cents on two consecutive trading days in a row.

The CME Daily Delivery Report showed that 659 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Once again the big short/issuer was JPMorgan out of its client account---and the two largest long/stoppers were Canada's Scotiabank with 329 contracts---and JPMorgan with 319 contracts for its in-house [proprietary] trading account once again.

This is the third time that JPMorgan has screwed over it clients in the April delivery month in gold---and I sometimes wonder who these "clients" might be.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that April open interest in gold fell by 640 contracts---and those were the ones posted on Friday for delivery today.  April o.i. in gold is now down to 1,186 contracts, minus the 659 that got posted for delivery tomorrow.

For the second day in a row, the April o.i. in silver remained unchanged at 172 contracts.

There were no reported changes in GLD yesterday---and as of 6:48 p.m. EDT yesterday evening, there were no reported changed in SLV either.  But when I checked the iShares.com Internet site at 2:11 a.m. EDT this morning, I saw that an authorized participant added 1,434,312 troy ounces.  Based on the current price action, I would guess that deposit was used to cover an existing short position.

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

The only activity in gold at the COMEX-approved depositories on Friday was the two kilobars withdrawn from the Mafra, Tordella & Brookes, Inc. depository.

In silver, there was 57,991 troy ounces reported received---and 366,995 troy ounces shipped out.  For a change, none of the activity involved JPMorgan.  After all the heavy activity of the last two weeks in silver, they must still be charging up the batteries on their fork lifts.  The link to that activity is here.

Over at the COMEX-approved depositories in Hong Kong on Friday, it was a much busier day.  At the Brink's, Inc. depository they reported receiving 10,830 kilobars, which is a lot---and shipped out 1,668 kilobars.  The link to the activity in troy ounces is here.

Since yesterday was the 20th of the month---and it fell on a weekday---The Central Bank of the Russian Federation updated their website with their March data.  It showed that they added 1 million troy ounces of gold to their reserves in the past month---and Nick's most excellent charts is posted below.

Here's a chart that was embedded in a Bloomberg story way back on March 31.  I didn't think the story was worth posting, but the chart is worth saving---as it shows the best performing asset classes in the first quarter of 2015.  I thank reader William Gebhardt for sending it along.

I have a decent number of stories for you today---and I hope that number doesn't expand by much as the evening progresses.

¤ Critical Reads

The S(chizophrenic) & P(sychotic) 500

Does this behavior look like a market that is pricing-in a Fed rate hike?  Total Schizophrenia...

And if you're wondering what catalyzed this latest 350 point ramp in The Dow?  Perfect bounce on Friday off the Payrolls cliff edge... and machines then auctioned stocks up to Friday's cliff edge in search of sellers...

The above is all there is to this brief Zero Hedge article that appeared on their website at 12:16 p.m. EDT on Monday afternoon---but the three embedded charts are worth the trip.  Today's first story is courtesy of Dan Lazicki.

Stan Druckenmiller Is Betting on Three Market Surprises in 2015

Stan Druckenmiller is betting on the unexpected.

The billionaire investor, who has one of the best long-term track records in money management, is anticipating three market surprises: an improving economy in China and rising oil prices. He also doesn’t expect the Federal Reserve to raise interest rates in 2015, a move most investors are forecasting will happen in September after six years of keeping them near zero.

“My fear is that we won’t see anything for a year and a half,” Druckenmiller, speaking of an interest rate increase, said in a Bloomberg Television interview. “I have no confidence whatsoever that we’ll see a rate hike in September or December.”

Druckenmiller, who now runs a family office after closing his Duquesne Capital Management hedge fund in 2010, has repeatedly criticized the Federal Reserve for keeping interest rates near zero for too long. He told an audience at the Lost Tree Club in North Palm Beach, Florida, on Jan. 18 that monetary policy has been reckless.

This story, along with an embedded 42:20 minute video interview, appeared on the Bloomberg website a week ago---and it's courtesy of reader Ken Hurt.  He says it's a "good one"---and I'll take his work for it, as I haven't watched it.

Gundlach Says Market Hasn’t Seen Full Impact of Fed Moves

DoubleLine Capital’s Jeffrey Gundlach, the bond manager who has beaten 99 percent of his peers over the past five years, said the full impact of the Federal Reserve’s “extreme policies” have yet to be felt in the market.

The Fed has been “very well-intentioned,” Gundlach said, speaking in an interview on Sunday on Wall Street Week. “The ultimate consequences of all these extreme policies have yet to be felt and will be felt.”

The central bank has kept rates in the U.S. near zero and embarked on unprecedented monetary stimulus since the 2008 financial crisis. Known for his contrarian views and top returns, Gundlach said rating the Fed very highly at this point is “sort of like a man who jumps out of a 20-story building, and after falling 18 stories, says, ‘So far, so good.’”

Gundlach, who manages the $46.2 billion DoubleLine Total Return Bond Fund, has beaten 99 percent of peers over the past five years, according to data compiled by Bloomberg. He said last month that if the Fed increases interest rates by mid-year, they would have to reverse course. On Sunday, he said that the probability of a rate increase by the Fed in June is very low, because the economic data doesn’t support such a move.

This Bloomberg article showed up on their Internet site at 9:48 a.m. on Sunday morning EDT---and I thank West Virginia reader Elliot Simon for sending it.

Oil prices source of imbalance, global banks say

Backers of the World Bank and International Monetary Fund are called on to remain vigilant against monetary shocks like the low price of oil, the banks said.

The IMF and World Bank issued a joint statement following their annual spring conference in Washington. The meeting came as global economic dynamics are shifting in an era of lower oil prices, a key barometer of economic health.

Both institutions said the global economy this year is growing faster than in 2014, though rates of growth are uneven.

Both banks issued a call on supporting countries to ensure they have effective policies in place to protect against "adverse shocks" like lower oil prices.

This UPI story, filed from Washington, was posted on their website at 8:17 a.m. EDT yesterday---and it's the first offering of the day from Roy Stephens.

Caveat creditor as IMF chiefs mull unpayable debts

The International Monetary Fund has sounded the alarm on the exorbitant levels of debt across the world, this time literally.

The theme trailer to its fiscal forum on the 'political economy of high debt' plays on our fears with the haunting tension of a Hitchcock thriller. A quote from Thomas Jefferson flashes across the screen in blood-red colours: "We must not let our rulers load us with perpetual debt."

We learn that public debt in the rich economies fell from 124pc of GDP at the end of Second World War to 29pc in 1973, a dream era that we have left behind.

The debt burden has since climbed at a compound rate of 2pc a year, accelerating into an upward spiral to 105pc of GDP after the Lehman crash. It is as if we had fought another world war.

When the IMF starts to quote Thomas Jefferson, you just know that there's big trouble in River City.  This must read Ambrose Evans-Pritchard commentary appeared on The Telegraph's website at 3:30 p.m. BST on their Sunday afternoon---and it's courtesy of Roy Stephens.

The Crowning Glory of Keynesianism

Readers of this publication will know that for some time, I’ve forecasted the creation of a new monetary system by which governments and banks gain total control over all monetary transactions.

On the surface of it, this may seem an impossible goal, as it would be so all-encompassing and would eliminate economic freedom entirely. Surely, it would not be tolerated. However, I believe that it’s not only relatively easy to create, but it will be sold in such a way that the public will see it as an absolute panacea to their economic woes. Only those who are far-sighted will understand its level of destruction in advance of its implementation.

It might transpire like this:

This commentary by Jeff Thomas appeared on the International Man website yesterday---and I thank their senior editor, Nick Giambruno, for sending it our way.

It’s official: Metro Vancouver is swept up in a real estate frenzy -- Barbara Yaffe

It is no exaggeration to use an F-word to describe Vancouver’s current real estate scene. As in, the market is in a Frenzy.

Observers describe a perfect storm of forces coming together to create a tempestuous result: A 5.8-per-cent jobless rate in B.C., low interest rates, a devalued Canadian dollar attracting more foreign buyers, and panic over prices going even higher if buying is delayed. Even the particularly vicious winters of recent years in Eastern Canada may be having an impact.

Meanwhile, the Bank of Canada warned last Wednesday about the risk of correction in three Canadian property markets — Vancouver, Toronto and Calgary.

For the moment, few are heeding the caution. A press release sent out last week by WestStone Properties, regarding its Evolve condominium project in Surrey, reported sales in a single day (April 11) of 300 condo units, worth $70 million.

This article appeared on the Ottawa Citizen website on Sunday sometime---and my thanks go out to Roy Stephens.

How sleepy Finland could tear apart the euro project

Finland is the unlikely stage for the latest turn in Greece’s interminable debt drama this weekend.

With events having decamped temporarily to Washington D.C., Athens will be keeping half an eye on developments in Helsinki, where the Nordic state of just 5.4m people heads for the polls on Sunday.

In the five years since Greece’s financial woes were revealed to the world, it has been sleepy Finland which has emerged as the most trenchant critic of EU largesse to the indebted Mediterranean.

The outcome of the country’s general election could now determine Greece’s future in the monetary union.

This news item showed up on the telegraph.co.uk Internet site at 1:30 p.m. on Saturday afternoon BST, which was 8:30 a.m. in New York.

Thousands in Germany protest against Europe-U.S. trade deal

Thousands of people marched in Berlin, Munich and other German cities on Saturday in protest against a planned free trade deal between Europe and the United States that they fear will erode food, labor and environmental standards.

Opposition to the Transatlantic Trade and Investment Partnership (TTIP) is particularly high in Germany, in part due to rising anti-American sentiment linked to revelations of U.S. spying and fears of digital domination by firms like Google.

A recent YouGov poll showed that 43 percent of Germans believe TTIP would be bad for the country, compared to 26 percent who see it as positive.

The level of resistance has taken Chancellor Angela Merkel's government and German industry by surprise, and they are now scrambling to reverse the tide and save a deal which proponents say could add $100 billion in annual economic output on both sides of the Atlantic.

This Reuters article, filed from Berlin, put in an appearance on their website at 2:30 p.m. EDT on Saturday afternoon---and I thank Orlando, Florida reader Dennis Mong for finding it for us.

Swiss Pension Schemes 'Bankrupt in 10 Years' -- It's Like They've Never Heard of Gold

Swiss pension schemes will be bankrupt within 10 years unless Switzerland's government wins public support for a radical overhaul of the retirement system, experts have warned.

The pressure on Switzerland's occupational pension system, which accounts for SFr800 billion ($840 billion) of assets, has intensified this year due to recently imposed charges on cash accounts and shrinking government bond yields.

Martin Eling, professor of economics at the University of St Gallen, estimated that occupational pension funds will face a SFr55 billion hole in their funding by 2030 if the government does not overhaul the system.

This Financial Times article was posted in the clear in a GATA release on Sunday.

Russia denies striking gas deal to net Greece €5 billion

Russia has denied providing up to €5bn to Greece for a planned gas pipeline, in a move that would significantly ease Athens' cash crisis.

According to reports in Der Spiegel, Moscow was ready to provide advanced payment to Greece in assent for its "Turkish Stream" project.

The magazine quoted a senior Syriza minister saying the deal would "turn the tide" for the debt-stricken country, and could be signed as early as Tuesday.

However, the Kremlin later denied it had reached an agreement for any financial aid in advance of future profits from the pipe's transit fees.

This news story appeared on the telegraph.co.uk Internet site at 4:30 p.m. BST on Saturday afternoon in London---and I found it over at the gata.org website.

Europe ready for Grexit contagion as Athens gets closer to Russian cash

The European Central Bank has warned that a rupture of monetary union and Greek exit from the euro could have dramatic consequences, but insisted that it has enough powerful weapons to avert contagion.

Mario Draghi, the ECB's president, said it would be far better for everybody if Greece recovers within EMU but made it clear that the currency bloc is no longer vulnerable to the immediate chain-reaction seen in earlier phases of the debt crisis.

Greek sources have told The Telegraph that Syriza may sign a deal with Russia for Gazprom's "Turkish Stream" pipeline project as soon as next week, unlocking as much as €3bn to €5bn in advance funding.

This confirms a report in Germany's Spiegel magazine, initially denied by both the Russian and Greek governments. It is understood that the deal is being managed by Panagiotis Lafazanis, Greece's energy minister and head of Syriza's militant Left Platform, a figure with long-standing ties to Moscow.

So, dear reader, which is it?  Will $5 billion be forthcoming from Russia or not?  Stay tuned to this ongoing soap opera/saga/farce---you pick.  This Ambrose Evans-Pritchard article was posted on The Telegraph's website at 10:00 p.m. BST on Sunday evening---and it's worth reading.  My thanks to Roy Stephens for sending it.

Greece Flashes Warning Signals About Its Debt

By the standards of his frenzied schedule here last week, the meeting on Friday between Yanis Varoufakis, the Greek finance minister, and Lee C. Buchheit, the dean of international debt lawyers, was a quiet one.

There was none of the media scrum that had followed Mr. Varoufakis around town during the semiannual meetings of the International Monetary Fund and World Bank, as he paid calls on the I.M.F. chief, Christine Lagarde; the head of the European Central Bank, Mario Draghi; the United States Treasury secretary, Jacob J. Lew, and even President Obama.

But the get-together with Mr. Buchheit carried critical meaning, according to experts here. After all, it was Mr. Buchheit who helped broker Greece’s most recent debt refinancing, in 2012.

As Greece now gropes for a resolution to its current financial problems, the meeting suggests Athens might still be holding out hope for a restructuring of its debt burden of 303 billion euros, or $327 billion.

Not a word in this story about Russia, gas, or the $5 billion dollars.  That doesn't entirely surprise me as it was posted on The New York Times website---and it appeared there on Sunday sometime.  It's another offering from Roy Stephens.

Stunned Greeks React to Initial Capital Controls and the "Decree to Confiscate Reserves"---and They Are Not Happy

Earlier today, following weeks of speculation, Greece finally launched the first shot across the bow of capital controls, when it decreed that due to an "extremely urgent and unforeseen need" (ironically the need was quite foreseen since about 2010, but that is a different story), it would be "obliged" to transfer - as in confiscate - "idle cash reserves" located across the country's local governments (i.e., various cities and municipalities) to the Greek central bank.

Several hours later the decree which was posted in the government gazette has finally percolated among the population, and the response to what even ordinary Greeks realize is now the endgame, is less than exuberant.

Bloomberg reports, that "as Greece struggles to find cash to stay afloat, local authorities say they oppose a government decision to use their reserves for short-term financing."

“The government’s decision to seize our reserves not only raises legal and constitutional issues, but also a moral one,” said George Papanikolaou, mayor of Glyfada, the third-largest municipality in the metropolitan region of Attica after Athens and Piraeus. “We have a responsibility to serve our citizens,” Papanikolaou said by phone on Monday.  Glyfada has about €16 million in cash reserves, he said.

This story appeared on the Zero Hedge website at 3:54 p.m. yesterday afternoon---and I thank Dan Lazicki for bringing it to our attention.

U.S.-Ukraine Military Drills Risk Intensifying Civil War – Former U.S. Diplomat

Commenting on the arrival of 300 U.S. paratroopers in Lviv, western Ukraine, former U.S. diplomat and Senate staffer James Jatras told Radio Sputnik that the initiative risks undermining the fragile peace in eastern Ukraine, and does absolutely nothing for U.S. security interests.

Late last week, U.S. paratroopers from the 173rd Airborne Brigade began a six-month training rotation with Ukrainian National Guard forces. Commenting their arrival, Jatras explained that "it's quite clear that these [drills] are intended to increase the combat effectiveness of the Ukrainian forces."

This, according to the expert, "could be understood as something that is directly meant to undermine the Minsk II agreement, and to support those elements in Kiev who still believe there is a military solution to the political problem in eastern Ukraine."

This article put in an appearance on the sputniknews.com Internet site at 8:00 p.m. Moscow time on their Monday evening, which was 1:00 p.m. EDT in Washington.  I thank Jim Skinner for sending it our way.

Turkey’s Long-Term Potential and Short-Term Problems -- Jim Rickards

I recently returned from Istanbul, Turkey. I had the opportunity to meet with a director of the central bank, along with stock exchange officials, regulators, major investors and one of Turkey’s wealthiest men, Ali Ağaoğlu, a flamboyant property developer known as “the Donald Trump of Turkey.”

I also spent time with everyday citizens from store owners to taxi drivers and more. Invariably, such a range of contacts produces information and insights beyond those available from conventional research channels and buy-side reports. It was a great chance to gather market intelligence on the world’s eighth-largest emerging market.

If you visit Istanbul, you cannot help but be impressed with the indelible beauty of the city. It’s easily on a par with Paris, Venice and other beautiful cities of the world. Istanbul also has more than its share of history, having witnessed the rise, fall and clash of empires from late-antiquity Romans, through Greek Byzantines, Ottoman conquerors and Persian rivals. The mix of East and West, Christian and Muslim and old and new is like no other city in the world.

Turkey is a test-tube study in how emerging market countries reach developed status. As such, it is subject to the interactions between developed and emerging markets, including hot money capital flows, currency wars and the struggles with interest rate policy and inflation.

This commentary by Jim appeared on the dailyreckoning.com Internet site yesterday sometime---and I thank Dan Lazicki for finding it for us.

U.S. Navy warships deployed to Yemeni waters, could block Iranian weapons

A U.S. carrier battle group is repositioning to the Arabian sea in response to a deteriorating security situation in

Yemen, but Pentagon officials denied reports that the move is designed to intercept Iranian ships.

“Ships are repositioning to conduct maritime security operations, they are not going to intercept Iranian ships,” Col. Steve Warren, Pentagon spokesman, said.

The Associated Press sent a breaking news alert reporting the aircraft carrier USS Theodore Roosevelt is steaming toward the waters off Yemen to join other American ships prepared to intercept any Iranian vessels carrying weapons to the Houthi rebels fighting in Yemen.

The carrier, as well as the cruiser USS Normandy, transited the Strait of Hormuz on Sunday night and are now conducting operations in the Arabian Sea, Col. Warren said.

This news item appeared on The Washington Times website yesterday---and I thank International Man's senior editor Nick Giambruno for passing it around.

Major Chinese Developer Says It Can’t Pay Dollar Debts

Kaisa Group Holdings Ltd. became China’s first real estate company to default on its U.S. currency debt, capping a month of distress in bond markets amid an anti-corruption probe and fueling concern that losses will spread.

The default coincides with the expiration of a 30-day grace period on $52 million of missed interest payments on two dollar-denominated bonds, according to a Hong Kong stock exchange statement Monday. Kaisa, based in the southern city of Shenzhen, is struggling to service 65 billion yuan ($10.5 billion) of debt owed to both onshore and offshore lenders while becoming embroiled in President Xi Jinping’s crackdown on graft.

The developer’s problems have rippled across the region’s debt market, where investors starved of yield elsewhere in the world have swooped in to boost returns. As the government’s anti-corruption probes widen, it’s raising concern that defaults will spread after overseas noteholders bought a record $21.3 billion of bonds issued by Chinese property companies.

“It’s been a canary that has been chirping for some time,” Gary Herbert, a money manager who helps oversee about $45 billion of fixed-income assets at Brandywine Global Investment Management LLC in Philadelphia, said in a telephone interview. “This is the beginning of an adjustment period in China that will see a lot of credit investors, who were chasing the promise of higher yields, ultimately disappointed.”

This Bloomberg story was posted on their Internet site at 6:19 a.m. EDT on Monday morning---and I thank Norman Willis for sharing it with us.

China makes big cut in bank reserve requirement to fight slowdown

China's central bank on Sunday cut the amount of cash that banks must hold as reserves, the second industry-wide cut in two months, adding more liquidity to the world's second-biggest economy to help spur bank lending and combat slowing growth.

The People's Bank of China (PBOC) lowered the reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5 percent, effective from April 20, the central bank said in a statement on its website www.pbc.gov.cn.

"Though the growth in the first quarter met the official target of around 7 percent for 2015, the slowdown in several areas, including industrial output and retail sales, has caused concern," said a report published by the official Xinhua news service covering the announcement.

The latest cut, the deepest single reduction since the depth of the global crisis in 2008, shows how the central bank is stepping up efforts to ward off a sharp slowdown in the economy.

This Reuters article, filed from Beijing, showed up on their Internet site at 12:15 p.m. EDT on Sunday afternoon---and my thanks go out to Harry Grant for bringing it to our attention.

Japanese population falls to 15-year low

Japan’s population has shrunk for the fourth year running, falling back to a level it was last at in 2000, the government said. More than one in four people are now 65 or older.

The population dropped by 0.17%, or 215,000 people, to 127,083,000 as of 1 October last year, according to the data released on Friday. The figure includes long-staying foreigners.

The number of people aged 65 or over rose by 1.1 million to 33 million and now outnumber those aged 14 or younger by two to one.

Japan’s rapidly greying population poses a major headache for policymakers who are faced with trying to ensure an ever-dwindling pool of workers can pay for the growing number of pensioners.

If you take a cursory glance at any chart regarding the demographics of Japan, you'll see that Japan's population is now in permanent  decline.  This article appeared on theguardian.com Internet site at 6:02 a.m. BST on Saturday morning---and it's worth reading.  I thank reader "F.P." for sending it our way.

Russia Returns to Gold With Biggest Purchases in Six Months

After a two-month hiatus, Russia’s appetite for buying gold is back.

The nation increased foreign reserves of bullion to 39.8 million ounces, or about 1,238 metric tons, as of April 1, compared with 38.8 million ounces a month earlier, the central bank said on its website Monday. The 30-ton purchase was the most since September.

Russia, the fifth-biggest holder of the metal, returned to buying gold after taking a break in January and February. The country, which bought gold through the last nine months of 2014, made the purchases to diversify foreign reserves and solve issues related to ruble liquidity, central bank Governor Elvira Nabiullina said in February.

“It’s interesting that Russia is still buying because it’s economy has taken a knock from Western sanctions and from lower oil prices,” David Jollie, an analyst at Mitsui & Co. Precious Metals Inc., said by phone from London. “This sends a very bullish signal to the gold market.”

It's only bullish if JPMorgan et al want it to appear that way---and yesterday wasn't that day, either.  This Bloomberg article put in an appearance on their Internet site at 7:59 a.m. Monday morning EDT---and I found it embedded in a GATA release.  It's worth reading.

Indian gold imports may rise 89 percent in April, jewellers group says

India's gold imports are likely to rise more than 89 percent at 100 tonnes this month compared with last year, mainly due to weakness in international prices and easing of restrictions by the Reserve Bank of India, an industry body said.

Gold imports stood at 53 tonnes during April last year, according to data given by The All-India Gems and Jewellery Trade Federation.

"Until now we have imported nearly 100 tonnes of gold. So we are expecting the total imports to be a little over 100 tonnes," GJF's new Chairman Manish Jain told PTI here. 

However, imports will be lower than March, when India had shipped in 159.5 tonnes of gold as jewellers were stocking up in preparation for Akshaya Tritiya and the marriage season, Jain said.

This short gold-related news item showed up on The Economic Times of India at 8:14 p.m. IST on their Monday evening---and it's another article I found on the gata.org Internet site yesterday.  It's worth your time as well.

Gold jewelers count on Indian festival fortunes to rouse deman

Indian jewelers are banking on what’s considered one of the most auspicious days for gold buying to spur demand in the world’s biggest bullion consumer.

Sales on Tuesday’s Akshaya Tritiya, viewed by the country’s more than 900 million Hindus as a traditional day to buy precious metals, may increase as much as 20 percent from 2014, Manish Jain, chairman of the All India Gems & Jewellery Trade Federation, said by phone from Mumbai on Monday. The nation’s gold consumption slid 14 percent last year.

A resurgence in India’s appetite for bullion may help halt a decline in gold prices for a third straight quarter that was prompted by a withdrawal of investors from gold-backed exchange- traded funds. Demand is getting a further boost after the government ended most controls on imports that helped contain a record current-account deficit and decline in the currency.

“A positive mood exists among the retail sector as Akshaya Tritiya is considered the most auspicious time of the year for purchase of gold,” Jain said. “Gold continues to be a dependable hedge against inflation and is still a valuable purchase” for Indians, he said.

This Bloomberg story from early this morning London time was posted on the mineweb.com Internet site.

Mystery of China's gold stash may soon be solved at IMF

China's push to challenge U.S. dominance in global trade and finance may involve gold -- a lot of gold.

While the metal is no longer used to back paper money, it remains a big chunk of central bank reserves in the U.S. and Europe. China became the world's second-largest economy in 2010 and has stepped up efforts to make the yuan a viable competitor to the dollar. That's led to speculation the government has stockpiled gold as part of a plan to diversify $3.7 trillion in foreign-exchange reserves.

The People's Bank of China may have tripled holdings of bullion since it last updated them in April 2009, to 3,510 metric tons, says Bloomberg Intelligence, based on trade data, domestic output and China Gold Association figures. A stockpile that big would be second only to the 8,133.5 tons in the U.S.

"If you want to set yourself up as a reserve currency, you may want to have assets on your balance sheet other than other fiat currencies," Bart Melek, head of commodity strategy at TD Securities, said by phone from Toronto. Gold is "certainly viewed as a viable store of value for an up-and-coming global power," he said.

This very worthwhile story was posted on the Bloomberg website at 10:01 a.m. on Monday morning EDT---and it's another story that was embedded in a GATA release.

China silver stockpiles surge

Silver stockpiles in China surged this year as the country’s slowing economic growth weakened demand for the precious metal, according to a state researcher.

Inventory monitored by the Shanghai Futures Exchange almost tripled to 341.5 metric tons April 9, the highest in a year, from 122.8 tons in the final week of 2014, according to weekly bourse data compiled by Bloomberg. Stockpiles on the Shanghai Gold Exchange also more than doubled this year to 263.97 tons on April 3, exchange data show.

Chinese silver producers delivered the metal to exchange warehouses amid falling physical demand, said Jin Xiangyun, a senior precious metals analyst at Beijing Antaike Information Development Co. China’s economy expanded at the weakest pace since 2009 last quarter, indicating a deepening slowdown. The global benchmark price has fallen 17 percent in the past year.

“Silverware and jewelry makers said they wouldn’t produce much because of weak demand,” Jin said in a telephone interview April 22, citing their recent survey of producers. “Fabricators usually purchase large amounts of refined silver after Chinese New Year holidays. That didn’t happen for this year.” The break was from April 18-24 this year.

This Bloomberg article from last Friday showed up on the mineweb.com Internet site.

Here's the real, forgotten meaning of 'The Wizard Of Oz'

Turns out the book and movie may be an economic fairy tale about America in the late 1800s — and gold.

Well, dear reader, if you are one of the few that doesn't know the real story behind L. Frank Balm's book "The Wonderful Wizard of Oz"---and the subsequent 1939 movie---please take 2:06 minutes out of your busy life---and watch this video that was posted on the businessinsider.com Internet site at 11:49 a.m. EDT on Sunday morning.  I thank Roy Stephens for today's last story.

¤ The Funnies











¤ The Wrap

Two weeks ago, the turnover or physical movement of metal brought into and taken out from the COMEX-approved silver warehouses was at a nadir and appeared to be cooling off. I openly questioned (myself) whether the four-year-old, frantic, unprecedented and unique-to-silver-among-all-commodities-physical-conveyance was approaching an end---and what that end would portend for price. I’ve been forced to put such thoughts on hold as a result of what transpired over the past two weeks, as the combined two week movement of metal was the largest two week turnover in memory, fully double the torrid 5 million oz average weekly movement of 2014.

This past week, more than 8.5 million oz of silver were physically moved either into or out from the six COMEX warehouses. Total COMEX silver inventories rose a relatively slight 0.8 million oz to 175.9 million oz for the week. Over the past two weeks, close to 20 million oz of actual metal was either moved into or taken out from the COMEX warehouses, while total inventories declined by mere 0.6 million oz. While this underscores the consistent observation of mine over the past year and longer that the frantic turnover in COMEX inventories were highly unusual in two regards - the outsized movement itself---and the fact that total inventories hardly changed at all - there is a more specific explanation for the past two weeks. Yep, JPMorgan again.

Basically, JPMorgan accounted for all the COMEX silver movement this week as well as much of what moved during the prior week. This week, 4.7 million oz were moved into the COMEX silver warehouse of JPMorgan and because that metal mostly came from other COMEX silver warehouses, total movement is fully explained by the growth in JPM holdings. Last week 3.4 million oz came into the JPM warehouse, so the two week increase of 8.1 million oz is directly connected to the 7.5 million oz that JPMorgan took in delivery for the March futures contract. (Please remember there is a 6% - under or over - weight tolerance for delivered COMEX silver contracts). - Silver analyst Ted Butler: 18 April 2015

Another day---and more slices off the precious metal salamis.

It was also another day where Russia, China and India showed the world that between the three of them, they're pretty much gobbling up all the newly mined gold on Planet Earth every year.

Yet still gold prices aren't allowed to go anywhere.  That applies to platinum and palladium, both of which are in structural supply/demand deficits as well.

Then there's silver.  With about 350 million troy ounces now in the hands of JPMorgan---and at the same time this company, along with Canada's Scotiabank, are short roughly 200 million troy ounces of silver in the COMEX futures market between them---and you have to ask yourself when and how this will all end.

I would guess the JPMorgan has enough silver in good delivery form to cover their entire short position if required to do so; but that comfort level [or their 'Get Out of Jail Free Card'] certainly doesn't extend to Scotiabank---unless they've managed to hide their silver stash out of sight in SLV.

Here are the 6-month charts for all four precious metals, plus copper and WTIC, as of the close of trading yesterday.

I was somewhat surprised to see the precious metal equities finish in the green yesterday---and wonder who the deep-pocket buyers were that were scooping up everything that John Q. Public was selling in the face of Monday's engineered price declines in both gold and silver.

And as I write this paragraph, the London open is about fifteen minutes away.  The gold price isn't doing much, but is down a buck and change from Monday's close.  Silver is unchanged---and platinum and palladium are up a dollar or two. 

Gold volume is just under 11,500 contracts, with virtually all the volume in the current front month.  Silver's net volume is just shy of 2,600 contracts---and about of a third of the total volume is roll-overs out of the May contract.

The dollar index didn't do a lot until shortly after 1 p.m. Hong Kong time---and since then it's up 26 basis points.

Yesterday's salami slices were pretty decent---and just eye-balling the above charts, "da boyz" still have work to do if they want to get back to the wildly bullish levels that the Commitment of Traders data showed a month ago.  I'd guess $50 in gold---and 50 cents in silver---and that's from their respective low ticks yesterday, not their closing prices.

But can they, or will they?  We got part of the answer yesterday---and it remains to be seen if there's more to come.  It wouldn't take much effort on behalf of JPMorgan et al, along with their HFT buddies, to do what's necessary.

I mentioned all this in Saturday's missive, but with another day of data in the history books, I'm just revisiting it briefly.

I would guess that all this price/volume will be in this Friday's COT Report, as there's no real reason why it shouldn't---and hopefully the same can be said for the price/volume today---as Tuesday at the close of the COMEX trading session, is the cut-off for Friday's report.

And as I fire today's column out the door at 5:15 a.m. EDT, I see that the gold price is flat---and silver is actually up a nickel. Platinum and palladium are up a bit more as well.  Gold volume is now up to 18,500 contracts---and silver's net volume is now at 4,800 contracts.

All in all there's not much happening from a price perspective---and the fact that the dollar index is now up 38 basis points---and was even even higher than that shortly before 5 a.m. EDT, I'm somewhat surprised to see the precious metals performing as well as they are.

But with all the problems in the world these days, I guess it really shouldn't come as much of a surprise that the precious metals are catching a bid despite what's going on with the dollar index.

It beats the heck out of me as to how the rest of the Tuesday session will turn out---and nothing will surprise me when I check the charts later this morning.

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

Ed Steer

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Tue, 21 Apr 2015 04:19:00 +0000
<![CDATA[Gold is (Once Again) Money—Jim Rickards]]> http://www.caseyresearch.com/gsd/edition/gold-is-once-again-money-jim-rickards/ http://www.caseyresearch.com/gsd/edition/gold-is-once-again-money-jim-rickards/#When:07:40:00Z "It's been a struggle for the President's Working Group on Financial Markets"

¤ Yesterday In Gold & Silver

The gold price didn't do much of anything until noon in Hong Kong on their Friday---and then it rallied about ten bucks, with the high of the day coming shortly before 11:30 a.m. in London trading.  From there it sold down to just above the $1,200 spot mark shortly after the equity markets opened in New York yesterday morning---and from there the price didn't do much into the close of electronic trading at 5:15 p.m. EDT.

The low and high ticks are barely worth the effort of looking up, but they were recorded as $1,197.00 and $1,207.80 in the June contract.

Gold finished the Friday session at $1,203.30 spot, up $5.50 from Thursday's close.  Net volume was a hair under 100,000 contracts.

The silver rally that began at noon in Hong Kong was somewhat more impressive---and it also got capped at the same time, which was shortly after 11 a.m. BST.  After that the silver price was the mirror image of the gold price, except the low price tick came at 12:30 p.m. in New York.  After that it traded ruler flat into the close.

The CME Group reported the high and low ticks as $16.185 and $16.49 in the May contract.

Silver finished the day at $16.225 spot, down another 4 cents---the same amount it was closed down on Thursday.  Net volume was very light at only 25,000 contracts.

The platinum price followed a very similar price pattern as gold and silver up until shortly before the London p.m. gold fix.  Then it rallied for the remainder of the Friday session, closing at $1,170 spot, up 12 bucks from Thursday.

The palladium chart was a mini version  of the platinum chart---and that precious metal finished the day at $782 spot, up 3 dollars on the day.

The dollar index closed late on Thursday afternoon at 97.69---and didn't do much until it began to head south starting about fifteen minutes before the London open on their Friday morning.  The 97.05 low tick of the day came at 11:15 a.m. BST---and the subsequent rally ended just before the equity markets opened in New York.  It developed a slightly negative bias around 12:15 p.m---and closed at 97.45---down 25 basis points.

The rallies in gold and silver ended at the point where the low tick in the dollar index was set.

The gold stocks opened in positive territory---and rallied to their highs within fifteen minutes.  But starting shortly after 11 a.m. EDT, they began to sell off, hitting their low ticks in slightly negative territory shortly after 2 p.m. in New York.  From there they rallied back into positive territory---and the HUI closed up 0.38 percent.

The silver equities followed a similar price pattern, except their rally after their 2 p.m. low ticks made it back to only unchanged, as Nick Laird's Intraday Silver Sentiment Index closed down a tiny 0.08 percent.

Nick Laird advised us that month-to-date the HUI is up 10.72 percent---and the Silver Sentiment Index is up 6.39 percent.  Year-to-date the HUI is up 7.73 percent---and the Silver Sentiment Index is up 2.47 percent.  For the latest week, the HUI was up 3.23 percent---and Silver Sentiment Index was up 0.51 percent.

The CME Daily Delivery Report showed that 624 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  The only short issuer was JPMorgan out of its client account.  The two big stoppers were Canada's Scotiabank with 314 contracts---and JPMorgan out of its in-house [proprietary] trading account with 299 contracts, screwing over their own clients once again.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest for April dropped by 1 contract---and now stands at 1,826 contracts still open, minus the 624 posted above.  Silver's April o.i. was unchanged at 172 contracts.

There was a deposit in GLD yesterday.  This time an authorized participant added 95,943 troy ounces.  And as of 9:55 p.m. EDT yesterday evening, there were no reported changes in SLV.

And for the third day in a row, there was no sales report from the U.S. Mint.

Over at the COMEX-approved depositories, there was 50,020 troy ounces of gold reported received at HSBC USA---and 8,134 troy ounces shipped out on Thursday.  The receipt was, almost to the ounce, the amount of gold that was shipped out of the Scotiabank depository on Wednesday.  The link to that activity is here.

Another day---and another big silver deposit into the vaults over at JPMorgan on Thursday.  This time they reported receiving 1,183,777 troy ounces---and 63,617 troy ounces were shipped out, mostly from Canada's Scotiabank.  The link to that action is here.

Just for fun here, once again, is Nick's updated chart showing JPMorgan's silver inventory at its New York depository as of the close of trading on Thursday---now up to 55.69 million troy ounces.  Is there more to come?  Beats me, but Ted says that they've already taken in much more silver than the 7.5 million they contacted for delivery in March---and I know that he'll have lots to say about it in his weekly review later today.

At the Gold Kilo Stocks COMEX-approved depository in Hong Kong, Brink's, Inc. reported receiving 55 kilobars---and shipped out 1,252 kilobars.  The link to that action, in troy ounces, is here.

The Commitment of Traders Report for positions held a the close of COMEX trading on Tuesday was pretty much what I was expecting.

In silver, the Commercial net short position declined by a healthy 6,573 contracts.  This brings the Commercial net short position down to 43,865 contracts, or 219.3 million troy ounces.

The 'Big 4' traders covered 1,200 contracts---the '5 through 8' traders actually added 500 contracts to their short position---and the small Commercial trader, Ted's raptors, added about 5,900 contracts to their long positions.  Ted said that JPMorgan's short-side corner in the COMEX silver market is down to about 17,000 contracts.

Under the hood in the Managed Money category, the picture was even better, as they sold 2,958 long contacts---and went short an additional 5,676 short contracts.

In gold, the Commercial net short position declined by 4,696 contracts, or 469,600 troy ounces.  The Big 4 traders covered 400 short contracts the '5 through 8' traders covered 2,300 short contracts---and the raptors added about 2,000 contracts to their long positions.

Under the hood in the Managed Money category of the Disaggregated COT Report, the technical funds sold 2,308 long contracts---and added 5,318 short contracts---so the numbers under the hood, like in silver, were much better than headline number in the Legacy COT Report.

Overall, gold and silver can be described as neutral for the most part from a COT perspective.  True, with the improvements this past reporting week, the positions are slightly more bullish,  however it appears that "da boyz"have gold and silver prices trending lower---and if they and their HFT partners really put their minds to it, they could peel another 60 bucks off the gold price---and a buck off silver---to get the technical funds in the Managed Money category back to the wildly bullish configuration we were in about a month ago.

But can they, or will they?  Beats me, so we wait some more.

Nick Laird was kind enough to provide the withdrawals from the Shanghai Gold Exchange for the week ending Friday, April 10.   I was hoping and expecting more, but the numbers are what they are.  They reported that 34.527 tonnes were taken out---and here is his most excellent chart.

I have a decent number of stories for you today---and I hope you have time in what's left of your weekend to read the ones that interest you the most.

¤ Critical Reads

Core Inflation Jumps Most Since October Due to Rent, Healthcare Costs

Following February's big bounce back MoM, Consumer Prices in March rose 0.2% MoM (less than the expected 0.3% rise) but it is YoY that is the great news for Americans. CPI fell 0.1% YoY in March (below expectations of unchanged) which means Consumer Prices haven't risen YoY in 3 months. However, while this clear disinflationary signal is persistent, Core CPI continued to rise 1.8% from last year  (above the 1.7% consensus) driven by big jumps in the cost of shelter (thank you Fed) and healthcare (thank you Govt); which should send shivers through the risk-bulls as The Fed may be forced to pull rate hikes forward.

On an annual basis, there is now a huge divergence between Core and Headline CPI, mostly as a result of dropping energy prices impacting the headline data.

This longish commentary, with lots of charts and graphs, was posted on the Zero Hedge website at 8:43 a.m. EDT yesterday morning---and today's first offering is from Dan Lazicki.

Stocks Slammed - Dow Tumbles 350 Points Into Red Year-to-Date

This tiny Zero Hedge article from yesterday consists of three charts---and although the Dow closed off its low tick, the fact that the the President's Working Group didn't show up to save the day on a Friday is a bad omen for next week.  But maybe they were there early enough to prevent a crash yesterday.  I guess we'll never know.

This story appeared on their website at 10:09 a.m. EDT on Friday morning---and it's the second offering in a row from Dan L.

Well That's Never Happened Before - Exhibit 1

We have never, ever, seen the U.S. equity market so disconnected from underlying macro fundamentals.

As the chart shows, the rising stock market is shockingly divergent from the U.S. Macro picture (the greatest divergence ever). This has happened before (in 2006/7) but on a lesser scale, and did not end well.

This tiny story with a must view embedded chart, put in an appearance on the Zero Hedge website at 3:37 p.m. EDT yesterday afternoon---and it's definitely worth a look.  That's three in a row from Dan Lazicki.

"We're All Frogs in Boiling Water" Santelli Says After Lacy Hunt Warns "This is Far From Over"

Global debt has expanded by $35 trillion since the credit crisis and as Lacy Hunt exclaims, "that's a net negative, debt is an increase in current consumption in exchange for a decline in future spending and we are not going to solve this problem by taking on more and more debt." Santelli notes that debt will actually keep growth "squashed down" and points out the low rates in Europe questioning the ability of The ECB's actions to save the economy which Hunt confirms as "longer-term rates are excellent economic indicators" and that is not a good sign for Europe. 

"This process is far from over," Hunt concludes, "rates will move irregularly lower and will remain depressed for several years."

Santelli sums up perfectly, "we're all frogs in boiling water," as we await the consequences of central planning.

This 3:29 minute CNBC video clip from 9 a.m. Friday morning is embedded in this Zero Hedge story from 4:35 p.m. EDT yesterday afternoon---and it's another news item courtesy of Dan Lazicki.  It's worth your while.

UBS’s Weber, BlackRock’s Fink on liquidity crunch debate

This 4:22 minute video video interview with Maria Bartiromo hosting Axel Weber and Larry Fink was posted on the foxbusiness.com Internet site at 4:22 a.m. EDT yesterday morning---and the stories from Dan just keep on coming.  There's also more from Larry Fink and Maria linked here.  This CNBC video clip runs for 8:28 minutes---and Dan sent that our way as well.

Delusional Keynesians Pushing Us Over a Cliff -- Mike Maloney

This 17:03 minute video presentation from Mike was posted on the youtube.com Internet site back on Tuesday---and for length reason had to wait for today's column.  I thank Dan Rubock for bringing it to our attention.

Why Schlumberger Will Fire 11,000

The announcement was simple and came as a part of Schlumberger Ltd.’s terrible first-quarter earnings announcement. The carnage of layoffs continues across the oil industry due to low crude prices.

Schlumberger chairman and CEO Paal Kibsgaard said: "In spite of the detailed preparations we made in the fourth quarter, the abruptness of the fall in activity, particularly in North America, required us to take additional actions during the quarter. These included the difficult decision to make a further reduction in our workforce of 11,000 employees, leading to a total reduction of about 15% compared to the peak of the third quarter of 2014."

This very interesting news item appeared on the 247wallst.com Internet site at 6:32 a.m. EDT on Friday morning---and I thank Orlando, Florida reader Dennis Mong for sending it our way.  There was also a UPI article about this---and it's headlined "Schlumberger to lay off 11,000"---and I thank Roy Stephens for this one.

Jim Rickards: Oil — The good, the bad and the ugly

Everyday Americans have good reason to celebrate the recent collapse in oil prices. This is the fastest, steepest decline in oil prices since the mid-1980s. Results are already showing up at the gas pump. The price of regular gasoline has collapsed from almost $4.00 a gallon to $1.99 a gallon in some places. For a driver who uses 50 gallons per week, that’s an extra $100 per week in your pocket; enough to buy a new dress or take your family out to a nice dinner. If that new low price sticks, the savings keep coming and it adds up to a $5,000 per year raise. Best of all, the government can’t tax the $5,000. If you got a pay raise, they would tax it, but if the cost of things you buy is lower they can’t tax the savings. What’s not to like? That’s the good news.

Economists assume this extra money in your pocket will immediately be spent. That extra spending might put some money in someone else’s pocket. For example, if you spend your $100 weekly savings from gasoline going out to dinner, you might tip the waiter $15, at which point the waiter has an extra $15, (maybe more if your neighbors are doing the same thing) and he can spend more, and so on. This is the famous “multiplier” effect at work, where an extra amount of spending leads to more spending by the recipients so that the total economic growth, what economists call “aggregate demand,” is higher than the initial spending. More good news.

At least that’s what you’ll hear on television.

When you look beneath the surface, you’ll see some things that are not so good are maybe even bad for your portfolio.

This short essay from Jim Rickards was posted on the darientimes.com Internet site yesterday sometime---and it's the first contribution of the day from Harold Jacobsen.

Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse

You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.

This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.

Modern banking emerged from the goldsmithing trade of the Middle Ages. Being a goldsmith required a working inventory of precious metal, and managing that inventory profitably required expertise in buying and selling metal and storing it securely. Those capacities segued easily into the business of lending and borrowing gold, which is to say the business of lending and borrowing money.

Most people today are only dimly aware that until the early 1930s, gold coins were used in everyday commerce by the general public. In addition, gold backed most national currencies at a fixed rate of convertibility. Banks were just another business—nothing special. They were distinguished from other enterprises only by the fact they stored, lent, and borrowed gold coins, not as a sideline but as a primary business. Bankers had become goldsmiths without the hammers.

This commentary by Doug Casey showed up on the internationalman.com Internet site yesterday---and I thank senior editor Nick Giambruno for bringing it to my attention, and now to yours.

Doug Noland: Horrible Risk Versus Reward

In an interview, Mr. Bernanke said he was sensitive to the public’s anxieties about the ‘revolving door’ between Wall Street and Washington and chose to go to Citadel, in part, because it ‘is not regulated by the Federal Reserve and I won’t be doing lobbying of any sort.’ He added that he had been recruited by banks but declined their offers. ‘I wanted to avoid the appearance of a conflict of interest,’ he said. ‘I ruled out any firm that was regulated by the Federal Reserve.’”

I’m reminded of Willie Sutton’s response to why he robbed banks: “Because that’s where the money is.” I could only chuckle at the New York Magazine headline: “Helicopter Ben Makes it Rain – for Himself.” It’s absolutely laughable that the former Fed chair suggests part of his decision for hooking up with a hedge fund was his sensitivity to public anxieties about the “revolving door” between Wall Street and Washington.

I, at least, would rather see Bernanke working with a traditional regulated financial firm, although his compensation would surely be much less. Especially in this Bubble backdrop with the global leveraged speculating community playing such an integral role, it just doesn’t look good. In an era where public confidence in the Federal Reserve is so thin and vulnerable, why couldn’t Bernanke have just stuck with his post-Fed career of writing, teaching and a few lucrative dinner engagements? After all these years, I still miss Chairman Volcker.

Here's Doug's weekly Credit Bubble Bulletin from late yesterday evening---and I had to dig up myself, as reader U.D. was out wining and dining his girlfriend.

Canada’s Political Mainstream Backs War in Ukraine

Canadians will go to the polls next October in the first national election since the Conservative Party won a majority government in 2011. There is intense concern among progressive people in the country about the prospects of the Conservatives winning another term in office.

The government of Prime Minister Stephen Harper is moving further and further to the right. It has aligned itself tightly with U.S. foreign policy, including being ‘holier than thou’ in its unconditional support of Israel. It joined the U.S.-led air war in Iraq six months ago and now it is joining the U.S. in expanding that to Syria. It has cemented Canada’s role as a leading climate vandal in the world. It has attacked civil and social rights across the board and is now deepening that attack with the proposed, ‘police-state Canada’ Bill C-51.

This leaves many Canadians favorable to the idea of an electoral and governing alliance between the two, large opposition parties in Parliament—the Liberal and New Democratic parties—in order to defeat the Conservatives. NDP leader Tom Mulcair says he is open to a governing coalition with the Liberals if neither party wins an electoral majority.

But on the increasingly dangerous issue in world politics—the war in eastern Ukraine and accompanying military threats and expansion of NATO in eastern Europe—there is an astonishing unanimity in the Canadian political and media establishment. NATO is embarked on a drive to weaken Russia, with all the risk and folly that entails—including a nuclear danger. The people and territory of Ukraine are being used as war proxies to get at Russia. Yet, there is nary a peep of disagreement in the Parliament in Ottawa.

This is an absolute must read for all Canadians---and once again I apologize profusely---and on bended knee---for the disgraceful and unforgivable behaviour of Prime Minister Stephen Harper et al in Ottawa.  My grandfather, who fought in France and Belgium in WWI, would be horrified if he could see how things have turned out.  This is a story that, for obvious reasons, had to wait for my Saturday column---and I thank Roy Stephens for sharing it with us.  It was posted on the counterpunch.org Internet site on March 31.

IMF tells regulators to brace for global 'liquidity shock'

An illusion of liquidity has beguiled financial markets across the world and spawned some of the worst excesses seen on Wall Street in modern times, the International Monetary Fund has warned.

Investors are borrowing money to buy shares on the U.S. stock market at a torrid pace and are resorting to the same sorts of financial engineering that preceded the last two financial crises.

"Margin debt as a percentage of market capitalisation remains higher than it was during the late-1990s stock market bubble. The increasing use of margin debt is occurring in an environment of declining liquidity," said the IMF in its Global Financial Stability Report.

"Lower market liquidity and higher market leverage in the U.S. system increase the risk of minor shocks being propagated and amplified into sharp price corrections," it said.

This must read Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site on Wednesday afternoon BST---and I thank reader U.D. for passing it around last night.

Greek 'day of reckoning' shakes stock markets

Fear that Greece could default on its debt and abandon the euro rattled global financial markets Friday.

News that negotiations between Greece and its international lenders are making little progress sent European stock markets down sharply, and the selling spread across the Atlantic. By the close of U.S. trading, stocks across industries were lower, with four of five stocks down. Investors shifted money into German government bonds, a perceived haven in troubled times.

In the U.S., disappointing first-quarter financial results from several big companies fed the selling. After American Express reported revenue that fell short of expectations, investors drove down its stock more than 4 percent.

"The day of reckoning" for Greece is fast approaching, said Uri Landesman, president of investment fund Platinum Partners. "People thought everyone would work it out, but if no one caves, there won't be a deal."

This AP story, filed from New York, appeared on the finance.yahoo.com Internet site yesterday afternoon EDT---and I thank Dennis Mong for digging it up for us.

Looming Greek 'crunch' threatens fresh global crisis, warns Osborne

George Osborne has warned that Greece's battle with Europe's creditor powers is nearing a "crunch" point and threatens to detonate a fresh global crisis if mishandled over the next days and weeks.

The Chancellor said the escalating crisis in Greece is now the biggest threat to the world economy and has become a haunting theme for finance ministers and central bankers meeting at the International Monetary Fund in Washington this week.

"The mood is notably more gloomy than at the last international gathering, and it is now clear to me that a misstep or a miscalculation by either side could easily return European economies to the kind of perilous situation we saw three or four years ago," he said.

"The crunch appears to be coming in May, and it would be a mistake to think that the UK would be immune. Of course, it would be the very worst moment for there to be any confusion about the direction of British of economic policy, or for a change of direction. We need resilience for moments like this," he said.

This is the second Ambrose Evans-Pritchard offering in today's column.  This one showed up on The Telegraph's website at 7:00 p.m. BST in London yesterday evening---and it's worth reading as well.  I thank Roy Stephens for sharing it with us.

John Batchelor interviews Stephen F. Cohen on the current situation in the Ukraine

It would appear as if the Minsk2 agreement is failing all along the Donbass frontier at numerous locations with hundreds of incidents of shelling by heavy artillery, tanks and rockets.  These incidents have been progressively increasing for a week.  

It would be no coincidence that the rhetoric against Minsk2 and the increasing numbers of shelling transgressions by Kiev forces have triggered yet another geopolitical change that has grave implications for peace. This is the Russian sale of the S 300 anti aircraft missile system to Iran. All part of the deteriorating geopolitical position between East and West. The S-300 system, incidentally, is a very efficient one that may prove rather impervious to attacking aircraft - for use around nuclear reactors, for instance. This weapon system sale has been on hold as Russia has tried to find a diplomatic solution to the Iran/USA stalemate. And it follows that Moscow is no longer confident in finding any diplomatic solutions with Washington.

Cohen very accurately has pointed out that Russia has changed its economic and treaty relationships with other countries profoundly due to its standoff with Washington and the E.U., while Washington has done little and the E.U. has suffered greatly. The latest change is with Greece, and it remains to be seen if this will further weaken both NATO and the E.U. On the other hand, Canada has sent a military contingent (perhaps only medical training personal).

This 39:45 minute audio interview was posted on the johnbatchelorshow.com Internet site on Tuesday---and I thank Larry Galearis for sending it our way.  It's definitely worth your while if you have the time---and the interest, which you should.

Airlines Slash Routes to Moscow in Latest Sign of Russia's Growing Isolation

In 2012, British discount airline EasyJet beat Virgin Atlantic Airways in a fierce competition for the rights to fly from London's Gatwick to Moscow's Domodedovo airport, a route that became available when its former operator was swallowed up in a merger. British aviation regulators gave the nod to EasyJet, which hailed the decision as a milestone in its international development.

Now, EasyJet has scaled back its London-Moscow service, from two daily flights to only one in each direction. The move, which took effect in late January, "was in response to the reduction in demand to and from Russia in recent months," an airline spokeswoman says.

The British discounter is one of many airlines curtailing flights to Russia and shelving planned expansion there, as the number of Russians vacationing abroad has plummeted and fewer foreign businesspeople and tourists are visiting the country.

This very interesting story, with the usual negative propaganda twist, appeared on the Bloomberg website at 6:57 a.m. Denver time on Friday morning---and I thank reader "G Roberts" for sending it along.

France sticks to its guns on shelved Mistral deliveries to Russia

French Foreign Minister Laurent Fabius on Thursday said France’s decision to suspend the delivery of two Mistral warships to Russia had not changed as the 1.2 billion-euro defence contract appeared to steadily sink.

“The issue has not evolved since the last announcements by the president,” Fabius told FRANCE 24 in referring to François Hollande’s decision in November to keep two Mistral-class helicopter carriers moored at the Saint Nazaire shipyard in western France indefinitely.

“We are at a stage where the decision [to fulfill the contract with Russia] is suspended,” said Fabius at a press conference in Paris.

This news item, which is certainly worth reading, put in an appearance on the france24.com Internet site on Thursday---and once again I thank Roy Stephens for sharing it with us.

Watch out for yuan/SDR topic at IMF meeting -- Jim Rickards

Jim Rickards, chief global strategist at West Shore Funds, explains why the topic about including the yuan in SDR's basket could steal the limelight at upcoming IMF and World Bank meetings.

This 4:24 minute interview was conducted by Bernie Lo out of CNBC Hong Kong---and was posted on their Internet site on Thursday evening EDT.  It's worth watching.  I thank Harold Jacobsen for his second contribution of the day.

Chinese Stocks Are Still Crashing

While the Chinese are long to bed, futures continue to trade on their exuberant stock market... and it's going south in a hurry. As we noted earlier, the catalyst appears to be a regulatory decision to increase the number of 'shortable' securities (and follow-through from PBOC's day prior demands of brokers to monitor margin trading). Both of these actions were taken as 'signals' that policymakers may be getting nervous about the ebullient wealth creation... Chinese stock futures are now down almost 7% - the 2nd biggest drop in 7 years.

This short must read Zero Hedge article was posted on their Internet site at 9:27 a.m. EDT yesterday morning---and doesn't bode well for the Monday open in the Far East.  My thanks go out to Dan Lazicki for finding it for us.

Marc Faber: The Chinese Will Not Print Money

In this episode of China Money Podcast, guest Dr. Marc Faber, renowned investor and publisher of The Gloom, Boom & Doom Report, speaks with our host Nina Xiang.

Dr. Faber shares his thoughts on why China's economic problems are solvable, explains the reasons behind his belief that China is likely to keep its currency stable, and rebukes the argument that capital may be flying out of China for a lack of confidence in the world's second largest economy.

Read an excerpt or watch an abbreviated video version of the interview. Be sure to listen to the full interview in the audio podcast.

This link contains a 7:24 minute video clip, along with a brief transcript, plus the entire 40:52 minute audio interview with Marc---so take your pick.  It was posted on the chinamoneynetwork.com Internet site yesterday sometime---and I thank Nitin Agrawal for passing it around.

Meet Fiery Cross Reef, China's Man-Made Military Island Outpost

Last week, we noted the hilarious irony in President Obama’s contention that China was “using its sheer size and muscle to force other countries into subordinate positions.” That of course, is a picture perfect description of US foreign policy and so the statement by the President is effectively an indictment of Washington’s own actions. 

Obama’s remarks were made in the context of China’s construction “activities” in the South China Sea where Beijing shares contested waters with the Philippines, Vietnam, Malaysia, Brunei and Taiwan. Essentially, China is building islands atop the Fiery Cross Reef in the Spratly archipelago, which some believe will be used for military purposes.

This very interesting story, with lots of photos, showed up on the Zero Hedge website at 6:55 p.m. EDT on Friday evening---and it's another contribution from Dan Lazicki.  Here's a BBC story on the same issue headlined "China 'building runway in disputed South China Sea island'"---and it's courtesy of Roy Stephens.

Somebody besides GATA calls attention to the Bank for International Settlements

Last Saturday, Zero Hedge published a long excerpt from what may be the most recent serious treatment of the Bank for International Settlements, the 2013 book "Tower of Basel: The Shadowy History of the Secret Bank That Runs the World" by Adam LeBor---and while it's worth reading, it may not convey much new to people who have been following GATA for more than a few months, since GATA often has called attention to the bank's crucial role in rigging the gold market on behalf of its member central banks.

That is, offensive to democracy as its secret operations are, the BIS is more the servant of its members than their master. The big problem is not the BIS but that the political systems of the bank's major members have been taken over by their domestic financial classes.

To recover its democracy each country will have to wage its own struggle. Satisfying as it might be, nuking Basel tonight wouldn't really accomplish much. The bankers quickly would find themselves another clubhouse somewhere else, equip it with the most sophisticated computers and market-rigging programs, and be back in business in a week, with the trading room of the Federal Reserve Bank of New York picking up the slack in the interim -- at least until some financial news organizations dared to attempt the sort of journalism they've long been leaving to Zero Hedge.

This absolute must read GATA posting, along with the embedded commentary on the BIS, appeared on the gata.org website a week ago---and for length reasons, had to wait for today's column.  Reader U.D. beat Chris Powell to this story by six hours and change---and I thank Chris for "all of the above" paragraphs of introduction.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on the ongoing debt drama in Greece, a continuously slack economic recovery, his opinion on World Gold Council predictions for Chinese gold demand, and global supply and demand for physical gold.

This 9:16 minute audio interview with Eric, hosted by Geoff Rutherford, appeared on the sprottmoney.com Internet site yesterday afternoon.

U.S. must return rare double eagle gold coins to family

The U.S. government must return 10 exceptionally rare gold coins worth millions of dollars each to a Pennsylvania family from which the purloined coins were seized a decade ago, a federal appeals court ruled on Friday.

By a 2-1 vote, the 3rd U.S. Circuit Court of Appeals in Philadelphia said Joan Langbord and her sons Roy and David are the rightful owners of the double eagle $20 gold pieces, after the government ignored their claim to the coins and missed a deadline to seek their forfeiture.

"The government knew that it was obligated to bring a judicial civil forfeiture proceeding or to return the property, but refused," Circuit Judge Marjorie Rendell wrote. "Having failed to do so, it must return the Double Eagles to the Langbords."

Patricia Hartman, a spokeswoman for U.S. Attorney Zane Memeger in Philadelphia, said: "We are weighing our options."

This very interesting Reuters article was picked up by the news.yahoo.com Internet site around 1 p.m. EDT yesterday---and I thank "Roger" for finding it for us.

Gold is (Once Again) Money -- Jim Rickards

Only three major assets went up strongly in the past six months: U.S. dollars, Swiss francs and gold.

The dollar/gold correlation was most striking because they had been inversely correlated since 2011 with the dollar getting stronger and gold getting weaker. Suddenly, gold and dollars were gaining strength together against commodities, euros, yen, yuan and most other measures of wealth.

Using our causal inference models, our tentative conclusion is that gold is behaving like money again. This could be an early warning of a breakdown in the international monetary system as a result of persistent deflation and currency wars. Investors are moving to safe havens, and dollars, gold and Swiss francs are at the top of the list.

However, our intelligence collections and inferential models suggest that something even more profound may be going on. Russian and Chinese gold acquisition programs have been going on for years; that story is well known to our readers. But those acquisitions have now passed the point that Russia and China need to have a seat at the table in any new international monetary conference.

This must read commentary by Jim was posted on the dailyreckoning.com Internet site yesterday---and I thank Dan Lazicki for his final offering in today's column.

Is gold tide beginning to turn? -- Lawrence Williams

Gold prices may well, for the time being at least, be driven by ups and downs in U.S. data and Fed interest rate raising speculation, coupled with the occasional impact of some peculiar massive gold trades on the markets, but we do see these things changing as Asia becomes ever more involved in global gold price setting.  We are already seeing the start of this, and it is bound to grow so gold probably is at or near its bottom, with better things ahead.

But gold price growth may well continue to proceed at a far slower pace than the precious metal’s adherents would anticipate, although at some point in time an inflection point will be reached (perhaps triggered by some key event) and we should see a big price surge yet again.

As always the question remains as to when this might occur. For the time being its always, as Lewis Carroll had the White Queen say to Alice in ‘Through the Looking Glass’ – “The rule is, jam tomorrow and jam yesterday, but never jam today” which Alice found most confusing saying “It must come sometimes to ‘jam today’” to which the White Queen demurred. But gold investors have to hope that indeed ‘jam today’ will come for the yellow metal and that that day will be soon at hand.

This interesting commentary by Lawrie---and brilliantly written closing paragraph---put in an appearance on the mineweb.com Internet site at 2:47 p.m. BST in London on their Friday afternoon, which was 9:47 a.m. EDT.

¤ The Funnies













If the cartoon below is lost on you, please click here. I didn't know it's meaning, either.

¤ The Wrap

Since it appears most, if not all of the metal shipped into the JPMorgan COMEX silver warehouse came from other COMEX silver warehouses, as opposed to being metal from outside the COMEX warehouse system, it doesn’t point to silver being in vast general oversupply. You may remember that it took until the last delivery day in the COMEX March delivery period for JPMorgan to get all of the 1,500 contracts allowed. Since those delivering against open futures contracts are better off delivering quickly, rather than later, the time JPMorgan had to wait to get its maximum number of physical deliveries suggests an unwanted and perhaps forced delivery circumstance on the part of the issuers.

While I’m talking about a reluctance to deliver physical silver against the March futures, this goes to a much broader issue. That issue is just because you can see it and count it, doesn’t mean it’s available. Not only is that true for the 175 million oz held in the COMEX warehouses, it is true for all the silver in the world, including the inventories in SLV and other ETF-type vehicles. Just because we can verify that a billion ounces or so exists in world inventories of 1,000 oz bars and those inventories are worth less than $20 billion at current depressed price levels, does it mean anyone can buy it.

Only those who own the 175 million ounces of silver held in the COMEX warehouses, or the one billion ounces of total silver bullion in the world, will decide at what price it is available for sale. While this can be said of any asset, in silver it is very special because of the extremely low total valuation, due to the artificial low price. Where I make the point that $20 billion is chump change in total’s financial world for a total asset class, the amount truly available for purchase is a tiny fraction of that already small total amount. That’s what makes the investment potential so great in silver. - Silver analyst Ted Butler: 15 April 2015

Today's pop 'blast from the past' is one that I've been avoiding for years.  Not because I don't like the song, because I do. It's because of its length.  But today I decided to bite the bullet and post it.  Those of you of a certain vintage will recognize the name Iron Butterfly---and only one song goes with the name---and the link to that classic 17-minute psychedelic rock number from 1968 is here.

Today's classical 'blast from the past' is much more sedate---and dates back to the late 18th century.  It's Wolfgang Amadeus Mozart's Sinfonia Concertante for Violin, Viola and Orchestra in E-flat major, K364 which he composed in 1779 when he was on a European tour.

This recording is on the older side---as it's in two parts.  In those days youtube videos couldn't be over 30 minutes in length, but one follows on the heels of the other, so you don't have to go looking for Part 2.  It's an all-star cast with Itzhak Perlman and Pinchas Zukerman, with Zubin Mehta conducting.  I've heard both of these violinists live when I was on the Edmonton Symphony Orchestra board of directors---and they are awesome.  Pinkas is playing the viola here, but is equally as proficient on the violin. The sound quality is first rate---and that's all that really matters.  The link is here.

With the world coming unglued at an ever faster pace, it was obvious that the powers-that-be would step into the precious metal markets once again---and that's precisely what they did.  Volumes were pretty low yesterday, so it wasn't all that hard to keep prices in line---but it's equally as obvious that regardless of the volume levels, the path of least resistance for gold and silver et al, was up---and probably dramatically so by the end of the Friday trading session.  And it was the fifth day in a row where gold wasn't allowed to get too far in the face of a rapidly declining U.S. dollar index.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday---and you can see the obvious price suppression in the face of a dollar decline---all brought about by JPMorgan et al trading in the COMEX futures market.

So, will gold go up or down from here?

The COT structure, as I said earlier, is market neutral at the moment---and with the dollar circling the drain and the equity markets world-wide starting to buckle under the strain, I'm sure that it's been a struggle for the President's Working Group on Financial Markets [a.k.a. The Plunge Protection Team] as they try too keep everything paper from imploding under its own weight.

Of course keeping everything that wants to blow sky high under control as well, is another sub-set of the PPT's job description---and at the moment, they're having an easy time of it.

But under the surface, changes are afoot---and the biggest red flag is the fact that JPMorgan has been buying massive amounts of physical silver since they initiated the drive-by shooting in that metal on May 1, 2011.  They've been very quiet and surreptitious about it up until March of this year---and if Ted Butler hadn't outed them---none of us would be the wiser, including you and I.

The last straw in all of this was their in-your-face-in-the-very-public-domain grab for 7.5 million troy ounces of silver for their own account [not for clients] during the March delivery month, the 1,500 COMEX contract maximum that any entity is allowed to take delivery of in one calendar month---all the while being heavily short the futures market in the same metal.

Since they're not only buying good delivery bars, but every U.S. silver eagle and Canadian maple leaf they can get their hands on, I doubt very much that the end game is further price suppression, unless they can get monster boxes of these coins added to COMEX good delivery status.

I've always been under the impression since Ted uncovered all of this that JPMorgan was in it for a Big Score---and that's spelled with a capital 'B'.  That will only occur when we have the expected-by-all financial and monetary reset at some point in the future.

The only question is---when will that be?

Borrowing a paragraph from Jim Rickards commentary at the Daily Reckoning posted in the Critical Reads section above, he had this to say "The [gold] withdrawals from the Federal Reserve represent efforts by central banks in Germany, Netherlands and elsewhere to take physical possession of their gold in advance of a systemic monetary breakdown."

And as I and others have said over the years, when gold is sporting it's new and out-of-reach price for all but the very rich, then silver will become the "new" gold---and that appears to be what Jamie Dimon & Co. are preparing for.

So we wait some more.

That's all I have for today which, as usual, is more than enough.

But before heading off to bed, I'd like to point out one more time that Casey Research's own Louis James has been watching a company that he is convinced will be the world's next high-grade gold producer.

It’s an extremely well-funded operation working a high-grade gold deposit 8x richer than the average mine---and that’s scheduled to throw the switch on a brand-new mine and start producing gold for the very first time.

Up to this point, the market is largely ignoring it, so shares of this company are currently trading well below book.  This is your chance to invest in an advanced-stage producer at a dramatic discount... just before its true value is realized. But you must act before April 30.

If you want to find out more, you can do so by clicking here.

Enjoy what's left of your weekend---and I'll see you here next week.

Ed Steer

]]>
Sat, 18 Apr 2015 07:40:00 +0000
<![CDATA[Chinese Gold Demand May Shoot Up 25 Percent in Coming Years—WGC]]> http://www.caseyresearch.com/gsd/edition/chinese-gold-demand-may-shoot-up-25-percent-in-coming-years-wgc/ http://www.caseyresearch.com/gsd/edition/chinese-gold-demand-may-shoot-up-25-percent-in-coming-years-wgc/#When:04:16:00Z "Should give you some indication of the power that JPMorgan et al have in the COMEX futures market"

¤ Yesterday In Gold & Silver

Gold rallied a bit in early Far East trading, but then got sold back down to the $1,200 spot mark just before 1 p.m. Hong Kong time.  From there it rallied to its noon high tick in London---and "da boyz" showed up at the London p.m. fix.  The subsequent rally that began thirty minutes later got capped shortly after 2 p.m. EDT in electronic trading---and despite the fact that the dollar index got crushed, JPMorgan et al managed to finish gold down on the day---and back below $1,200 spot.

The high and low ticks were recorded by the CME Group as $1,208.80 and $1,194.30 in the June contract.

Gold finished the Thursday session in New York at $1,197.80 spot, down $3.70 from Wednesday's close.  Net volume was pretty decent at 146,000 contracts.

Once again the silver chart was a virtual carbon copy of the gold chart, except the HFT boyz really did a number on the price at the London p.m. gold fix---and managed to close it down on the day as well.

The high and low tick in that precious metals was reported as $16.475 and $16.10 in the May contract.

Silver closed yesterday at $16.265 spot, down 4 cents from Wednesday's close.  Net volume was 34,500 contracts, about 50 percent more than Wednesday's volume, as it took that much firepower to first of all kill the rally, then drive it to its low tick of the day.

It was more or less the same story in platinum, with the high tick coming shortly before the COMEX open.  Then the HFT boyz did their thing at the London p.m. gold fix, like they did in gold and silver---and that, as they say, was that.  Platinum was closed down two dollars on the day at $1,158 spot.

The palladium price did precisely nothing until 1 p.m. in Zurich---and then it began to rally, but wasn't allowed above the $780 spot price mark, but did manage to close up 11 bucks on the day at $779 spot.

The dollar index closed late on Wednesday afternoon in New York at 98.40---and traded flat until it fell off a 50 plus basis points cliff at 8 a.m. Hong Kong time.  It then rallied more or less in a straight line until 10 a.m. BST---and from there began to head lower, with the 97.33 low tick coming around 1:45 p.m. EDT, which was fifteen minutes after the COMEX close.  It rallied back about 30 basis points from there, before trading sideways for the remainder of the day.  The dollar index closed the Thursday session at 97.69---down 71 basis points from Wednesday's close.

You should carefully note that there was virtually no reaction in gold allowed at 8 a.m. Hong Kong time when the dollar index got clocked for 50 basis points---and nothing was going on in the currencies at the 10 a.m. EDT London p.m. fix when gold, silver and platinum got smacked down.  The cause of all this was paper trading on the COMEX.

The gold stocks followed the gold price like a shadow all day yesterday.  They opened in positive territory, but once the powers-that-be stepped into the precious metal market at the London p.m. gold fix, down went the share prices to their lows of the day at 10:30 a.m., although they did make it back into positive territory briefly before the price got turned lower once again shortly after 2 p.m. in New York.  The HUI closed down 1.12 percent.

The silver equities started off in positive territory as well, but when they turned negative, they never got a sniff of positive territory after that, with their low ticks coming minutes after 1 p.m. EDT.  There was a rally into the secondary high minutes after 2 p.m., but it was rather anemic.  The shares got sold down from there---and closed close to their lows. 

On a 4 cent drop in price, Nick Laird's Intraday Silver Sentiment Index closed down 2.29 percent, giving back virtually all of Wednesday gains.

The CME Daily Delivery Report showed that 1 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in April dropped by 319 contracts, which was no surprise considering the fact that the 334 contracts issued yesterday, will be delivered today.  The current gold o.i. for April now sits at 1,827 contracts.  Silver open interest for April rose 2 contracts to 172.

We've had two big delivery days in gold so far in April---and the dates were quite some distance apart.  I'm wondering out loud at this point how many more days will pass before the remaining short/issuers step up to the plate with the next tranche---and how much of that will end up in JPMorgan's vault for its own account.

So we wait.

There were no reported changes in GLD yesterday---and as of 9:53 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

I got ahead of myself in Thursday's column and posted Joshua Gibbons' changes to the SLV Bar List from the prior week by mistake.  I discovered my error late yesterday morning---and had the offending paragraphs removed---and here are the correct ones for the internal goings-on at SLV as posted at the iShares.com Internet site yesterday, for the week ending at the close of business on Wednesday.

"Analysis of the 15 April 2015 bar list, and comparison to the previous week's list.  3,059,139.7troy ounces were added (all to Brinks London), no bars were removed or had serial number changes."

"The bars added were from: Solar Applied Materials (1.7M oz), Kazakhmys (0.6M oz), KGHM (0.3M oz), and 15 others."

"As of the time that the bar list was produced, it was overallocated 11.2 oz.  All daily changes are reflected on the bar list."

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

There was no gold reported received at the COMEX-approved depositories on Wednesday, but 50,052 troy ounces were shipped out the door---and almost all of it came from the vaults of Canada's Scotiabank.  The link to that activity is here.

In silver, there was another 1,191,275 troy ounces received---and it should come as absolutely no surprise to anyone that it went straight into JPMorgan's vault.  That should just about complete the 7.5 million ounces that they had coming as the result of the March delivery month.  There were 40,076 troy ounces shipped out---and the link to the silver action is here.

And just for general interest sake, JPMorgan is now sitting on 54.51 million troy ounces of silver in their COMEX-approved depository in New York.  Here's the updated chart as of Wednesday---and as I said last week, they opened their silver warehouse for business just two days before the May 1 drive-by shooting that they themselves orchestrated.

The COMEX-approved 'Gold Kilo Stocks' warehouses in Hong Kong also had some movement.  It was at the Brink's, Inc. depository once again, as they reported receiving 100 kilobars---and shipped out 3,125 of them.  The link to the troy ounces numbers are here.

The other day I was talking about the ongoing raid against gold ETF Central Gold Trust by Cayman Island-based hedge fund, North Pole Capital Master Fund.  Here's a press release on it that came out yesterday morning.  If you are a shareholder in this ETF, it's a must read.

I don't have all that many stories again today---and I'll leave the final edit in your hands.

¤ Critical Reads

Dollar Dump Sends Oil, Bonds and Stocks Surging

The sudden decision to buy EUR and dump USDs (after a slew of Fed speakers spewed their usual spew) has sparked a buy everything trade across markets as bonds, stocks, and crude are surging...

Of course the only things that weren't "surging" in price were gold and silver---and we know why that was the case.  This brief Zero Hedge piece, with some excellent charts embedded, were posted on their Internet site at 1:55 p.m. EDT Thursday afternoon---and today's first story is courtesy of Dan Lazicki.

Rubin: There's 'Realistic Possibility' Stocks Are in a Bubble

You can add former Treasury Secretary Robert Rubin to the list of those concerned that bubbles might be building in financial markets.

"I don't have a personal view on whether we now have [market] excesses or not," he said at a conference in Washington this week, MarketWatch reports.

"But it certainly is a realistic possibility when you look at the U.S. stock market, which is near all-time highs, when you look at covenant-light and now non-covenant lending, [and] a vast increase in fixed-income [exchange-traded funds]."

Another person with a keen grasp of the obvious.  This article showed up on the newsmax.com Internet site at 9:00 a.m. EDT yesterday---and it's courtesy of West Virginia reader Elliot Simon.

Weird Walmart plumbing problem shutting down stores across America, one in Brandon, Florida

Walmart customers can't understand what's plaguing the "plumbing problems" of Walmart stores from Brandon to California.

"Must be a major plumbing problem is all I can say," would-be customer Dale White said as security guards turned him away from the Supercenter on Brandon Boulevard in Brandon.

The retail chain announced Monday that five stores are shutting down - one in Brandon, two in Texas, one in Oklahoma and one in California - due to clogging and drainage problems.

The shutdown blindsided about 400 Brandon Walmart workers who must now find another store to transfer to or receive 60-days pay for the loss of their jobs.

However, 8 On Your Side has found no paperwork and no work done on the plumbing. According to Hillsborough County, Walmart didn't notify the county's permit department either. No one there has heard a peep from Walmart about any major repairs.

On Tuesday, 8 On Your Side stopped by the Walmart, and found no plumber in sight at the Brandon Supercenter, just hundreds of confused and concerned customers.

I had this rather odd story sent to me by a number of readers yesterday---and I must admit that even I don't know what to make of this.  I picked a story close to the source in Brandon, Florida.  It was posted on the wfla.com Internet site on Wednesday afternoon---and I thank Roy Stephens for sending it.

Ex-JPMorgan Banker Charged With Stealing $20M From Clients

A former JPMorgan Chase & Co. banker was arrested Thursday on charges he stole $20 million from clients over a four-year period, using some of the money to make personal investments and pay a home loan.

Bail was set for Michael Oppenheim, 48, of Livingston, New Jersey, at $1 million by a magistrate judge who also required home detention and electronic monitoring.

Oppenheim's lawyer, Richard Gamburg, said his client would plead not guilty to charges including wire fraud, embezzlement, investment adviser fraud and securities fraud. He said he expected Oppenheim to be released Friday.

Mike Fusco, a JPMorgan spokesman, said the bank alerted authorities to the crimes and worked closely with officials. He said Oppenheim was a financial adviser at a Manhattan branch.

Criminality is pretty much the modus operandi at JPMorgan---and stories like this are now met with little more than a "what else is new?" look.  In actual fact, Jamie Dimon should be in an orange jump suit already.  This particular AP story appeared on the abcnews.go.com Internet site at 6:46 p.m. EDT yesterday---and it's the second offering of the day from Elliot Simon.

Barron's: Buffett Avoids Taxes, But Obama Still Loves Him

Warren Buffett is the world's third richest man with a fortune estimated at $71 billion, yet he is able to exploit a loophole and pay a ridiculously small amount in federal taxes.

This week’s Barron’s sheds light on why Buffett has evaded the IRS’ snare for so long.

Buffett, chairman and CEO of the Berkshire Hathaway conglomerate, does not publicize his tax returns. But for the tax year 2010, he reportedly paid $6.9 million on taxable income of $39.8 million.

For many years, he boasted his tax rate was lower than his secretary’s, largely due to the fact he took so little income from Berkshire.

This interesting article put in an appearance on the newsmax.com Internet site at 10:48 a.m. EDT on Wednesday morning---and it's the third offering of the day from Elliot Simon.

Wary of natural disaster, New York Fed bulks up in Chicago

The New York branch of the U.S. Federal Reserve, wary that a natural disaster or other eventuality could shut down its market operations as it approaches an interest rate hike, has added staff and bulked up its satellite office in Chicago.

Some market technicians have transferred from New York and others were hired at the office housed in the Chicago Fed, according to several people familiar with the build-out that began about two years ago, after Hurricane Sandy struck Manhattan.

Officials believe the Chicago staffers can now handle all of the market operations that are done daily out of the New York Fed, which is the U.S. central bank's main conduit to Wall Street.

Well, dear reader, if you believe that bulls hit story, I've still got that bridge that's looking for a good home.  I lifted this Reuters story from yesterday's edition of the King Report---and this is what Bill King had to say about it: "When the Fed had to save the stock market in 1987, it used the Major Market Index futures, which were traded on the CBOT.  Does the Fed want close proximity to the Chicago derivative exchanges for some reason? Is Yellen a closet Cubs fan? This move appears to create another Plunge Protection bunker."  That last reason is probably much closer to the truth.

Ben Bernanke to Join World's Most Levered Hedge Fund: Chicago-Based HFT Powerhouse Citadel

Several years ago, Zero Hedge first, and to our knowledge only, reported that when it comes to unofficially executing trades in the equity market the New York Fed - through a slightly more than arms-length arrangement - does so using Chicago HFT powerhouse Citadel. In other words, while Citadel was instrumental in preserving the smooth, diagonal ramp in stocks since 2009 and igniting upward momentum just as everyone else stared to sell when the Markets Group of the New York Fed called, it was also paid handsomely: after all, nobody checks the Fed's broker commission statement. In fact according to some, indirect Fed compensation to what is the world's most leveraged hedge fund has been in the billions over the past decade.

Well, now it's payback time, and as The New York Times reported overnight, the Brookings Institution's favorite blogger, former Fed Chairman Ben Bernanke, has joined none other than Citadel as an advisor.

According to the NYT, "while Mr. Bernanke will remain a full-time fellow at the Brookings Institution, the new role represents his first somewhat regular job in the private sector since stepping down as Fed chairman in January 2014.  His role at Citadel was negotiated by Robert Barnett, the Washington super-lawyer who also negotiated a deal for his book, “The Courage to Act,” which Mr. Bernanke recently submitted to his editor and will be published in October."

This very interesting article was posted on the Zero Hedge Internet site at 6:37 a.m. EDT yesterday morning---and I thank Dan Lazicki for sending it our way.  There was another Zero Hedge story from Dan on this subject from yesterday as well---and it's headlined " 175,846,629,768 Reasons Why Ben Bernanke Joined Citadel".

Another Former IMF Head Arrested: Rodrigo Rato Perp Walked In Madrid

As we reported earlier, the former chief of the IMF Rodrigo Rato, who was succeeded in 2007 by another scandalous figure, Dominique Strauss-Khan, was recently put under investigation by Spanish authorities for money-laundering, benefiting from a tax amnesty to repatriate previously undeclared offshore funds. This is in addition to at least one previous investigation into his role as chairman of Caja Madrid, the failed savings bank, and its successor Bankia.

And, unlike every single JPM banker pretty much ever, moments ago Rato became the second former IMF head in several years (following DSK), to be placed under arrest.

While it is notable that Rato apparently did not have enough cash with which to pay off the prosecuting judge and have the case against him dropped, one wonders what the odds are for Christine Lagarde to complete the trifecta of arrests of people who are in the one position which has become the most cursed in the New Paranormal world.

Because while the IMF was originally created to pay for "bail outs", in recent years its former heads are far more concerned with paying just the "bail."

This Zero Hedge article showed up on their Internet site at 3:21 p.m. EDT on Thursday afternoon---and it's another story courtesy of Dan Lazicki.

Contagion Arrives: European Peripheral Bond Risk Soars

Just yesterday, German Finance Minister Schaeuble bent the truth, proclaiming that there was no sign of contagion from Grexit concerns. Today, it appears, he will be eating his words, as Italian, Spanish, and Portuguese bond spreads have exploded higher (up 15-30bps this week) amid the collapse of Greek sovereign and bank bonds.

It's not just Greek Sovereigns that are plunging, Greek Bank Bonds have collapsed...

It's not just Schaeuble that doesn't see any problems. Stan Druckenmiller, the Chairman and CEO of Duquesne Family Office, said that with regard Greece leaving the euro: "Draghi has QE at his disposal.  My guess is there won’t be contagion, but even if there is, he can contain it, and soon as market participants see that, you won’t get contagion."

All we need now is for some E.U. leader to claim "Grexit risk is contained," and we know trouble is ahead.

This is another Zero Hedge story from late yesterday morning EDT---and it's also courtesy of Dan L.  It's worth reading---and the charts are worth a look as well.

Greece pushed a step closer to Grexit after IMF snub

Greece has been pushed a step closer to default and potential exit from the euro after one of its main lenders, the International Monetary Fund, all but ruled out allowing the cash-strapped country to delay repaying the €1bn (£722,000) due next month.

The head of the IMF, Christine Lagarde, said delaying the payments would be an unprecedented action that would only make the situation worse.

Speaking at the organisation’s spring meeting, she said: “Payment delays have not been granted by the board of the IMF in the last 30 years.”

Her intervention is likely to heighten fears that senior policymakers in the US and Europe are preparing for Greece to leave the eurozone.

This Greece-related story appeared on theguardian.com Internet site at 6:54 p.m. BST in London yesterday evening---and I thank Roy Stephens for sliding it into my in-box late last night Denver time.  Here's the Ambrose-Evans Pritchard spin on this from 7 p.m. EDT last night---midnight in London---and The Telegraph article is headlined "Grexit dangers mount as Greece's Yanis Varoufakis warns of 'liquidity asphyxiation'"---and it's also courtesy of Roy Stephens.

For Greece All Bets Are (Literally) Off: Bookie Closes Grexit Market

Bookmakers William Hill have closed their markets on whether Greece will leave the Eurozone during 2015 and on which country would be first to leave the Eurozone.

'Greece had been heavily backed down to 1/5 to be the first to quit the Eurozone, and we'd also been shortening the odds for Greece to leave during 2015. They'd come down from 5/1 to 3/1.' said William Hill spokesman Graham Sharpe, 'It is now looking increasingly likely that they could begin the process of departing very shortly'

'No one is interested in backing Greece to stay in the Eurozone until the end of the year, so we decided to pull the plug on the markets until either the decision to leave is taken, or the crisis point passes and a plan is put in place enabling the country to remain in' added Sharpe.

This brief news item is also from the Zero Hedge website on Wednesday morning---and the first reader through the door with it was Dan Lazicki.

Greece plans to raid coffers as creditors dash hopes of resolving cash crisis

Cash-strapped Greece is planning to resort to drastic measures to stay afloat, as the country's bail-out drama moves to Washington today.

Finance minister Yanis Varoufakis is due to drum up support for his debt-stricken nation when he meets with President Obama at the White House later today.

The meeting with the world's most powerful leader comes as a desperate Athens could raid the country's pensions funds in order to continue paying out its social security bill.

The story appeared on the telegraph.co.uk Internet site at 5:15 p.m. on Wednesday evening BST---and my thanks go out to Roy Stephens for sharing it with us.

Three Prominent Poroshenko Critics Killed in Kiev in Three Days

A prominent Ukrainian journalist, known for his critical views of Poroshenko's government was shot dead in Kiev on Thursday, in the latest series of suspicious deaths of opposition supporters.

Oles Buzina, 45, a supporter of ex-president Viktor Yanukovych, was shot in the street. Buzina's body was found on the ground nearing his apartment building close to the city center. The head of Kiev’s police department Alexander Tereschuk said that a TT gun was allegedly used in the crime.

According to the neighbors, the journalist was probably shot while jogging. He was found wearing a sports outfit. The 45-year-old was shot by two men in masks who disappeared from the crime scene in a Ford Focus car with either Latvian or Belarusian number plate.

This story was posted on the sputniknews.com website at 7:55 p.m. Moscow time on their Thursday evening, which as 12:55 p.m. EDT in Washington---and I thank Jim Skinner for sending it our way.  It's worth reading.

E.U. hiring 'myth-busters' on Russian propaganda

The E.U. foreign service is recruiting a handful of new experts to help counter Russia’s anti-Western propaganda.

The job description, sent out on 20 March to E.U. states’ embassies in Brussels, says their task will be “correction and fact-checking of misinformation/myths”.

It will also involve “development and regular updating of E.U. ‘narrative’ via key messages/lines to take, articles, op-eds, factsheets and info-graphics, with an emphasis on communicating the benefits of the EaP”.

The new staff are to be Russian speakers and to do “analysis/monitoring of reporting on E.U. policies” in Russian language media.

How can this be???  This is so far beyond laughable that it has to be seen as pathetic desperation---and it just remains to be seen how total the failure of this exercise in futility will be.  It is, of course, courtesy of Roy Stephens.  It was filed from Brussels---and posted on the euobserver.com Internet site at 6:20 p.m. Europe time on Thursday evening, which was 12:20 p.m. EDT in New York.

After Rescuing Ukraine, U.S. Taxpayers to Bail Out Iraq Next

Having generously (if not obliviously) stepped up to the plate to bail out Ukraine (with open-ended bond guarantees), U.S. taxpayers are opening their wallets again - this time for Iraq. As Reuters reports, cheap oil has ravage Iraq's state finances just as the government faces rising military spending from the war it is waging against ISIS; and so it has decided to issue $5 billion in international bonds. However, Iraq is considering other ways to cover its budget deficit, including asking the IMF (i.e. U.S. taxpayers) for relief funding and also requesting the controversial U.S. Export-Import Bank (U.S. Taxpayers) finance the purchase of 10 planes from Boeing Co, which cost the government $500 million.

Cheap oil is ravaging Iraq's state finances, just as the government faces rising military spending from the war it is waging against Islamic State militants. As Reuters reports, Iraqi Finance Minister Hoshyar Zebari said the government was facing a budget deficit of $25 billion, out of a budget of approximately $100 billion. Iraq's 2015 budget is based on an oil price of $56 per barrel, he said.

Iraq has decided to issue $5 billion in international bonds and is negotiating the terms as one of several measures as it seeks to relieve the pressure of low oil prices on its finances.

Iraq is considering a number of other measures to cover its budget deficit, including asking the International Monetary Fund for relief funding of between $400 million and $700 million, Zebari said.

This news item appeared on the Zero Hedge website at 3:07 p.m. on Thursday afternoon EDT---and once again I thank Dan Lazicki for finding it for us.

Iran’s negotiating side is 5+1 not U.S. Senate: Rouhani

President Hassan Rouhani says Iran’s negotiating side in the nuclear talks is the 5+1 group of world powers and not the U.S. Senate or the House of Representatives.

He made the remarks during an address to an audience of people in Rasht, the capital of the northern province of Gilan, on Wednesday.

Rouhani stressed that whatever hardliners in the U.S. and the Senate, as well as the allies of the U.S. in the region say is of no concern to the Iranian nation and administration.

This article put in an appearance on the Tehran Times on Thursday local time---and it's the third contribution of the day from Roy Stephens.

Afghan opium cultivation ‘grew 40-fold’ during US operation - Russia Security Council chief

Opium production in Afghanistan has “grown forty fold” in the 13 years of US Operation Enduring Freedom, according to the head of the Russian Security Council. The intervention has “exacerbated existing problems,” rather than solved them.

“Unfortunately, the failed policy of Washington did not solve, but on the contrary exacerbated, the existing problems,” Nikolai Patrushev has said while addressing the heads of the Shanghai Cooperation Organization Security Council.

At the same time, the aims of introducing foreign military to Afghanistan, including the destruction of Al-Qaeda and Taliban, were not accomplished, he added.

According to Patrushev, Afghan extremists’ organizations benefit from lax law enforcement and use their positions in northern Afghanistan to enter neighboring countries in Central Asia.

This interesting story appeared on the Russia Today website on Wednesday afternoon Moscow time---and I thank Norman Willis for bringing it to our attention.  And even more disturbing story about the Afghanistan and opium---which was only hinted at in the above RT story---can be found linked here.

Deal Reached on Fast-Track Authority for Obama on Pacific Trade Accord

Key congressional leaders agreed on Thursday on legislation to give President Obama special authority to finish negotiating one of the world’s largest trade accords, opening a rare battle that aligns the president with Republicans against a broad coalition of Democrats.

In what is sure to be one of the toughest fights of Mr. Obama’s last 19 months in office, the “fast track” bill allowing the White House to pursue its planned Pacific trade deal also heralds a divisive fight within the Democratic Party, one that could spill into the 2016 presidential campaign.

With committee votes planned next week, liberal senators such as Sherrod Brown of Ohio are demanding to know Hillary Rodham Clinton’s position on the bill to give the president so-called trade promotion authority, or T.P.A.

Trade unions, environmentalists and Latino organizations — potent Democratic constituencies — quickly lined up in opposition, arguing that past trade pacts failed to deliver on their promise and that the latest effort would harm American workers.

This New York Times article, filed from Washington, appeared on their Internet site yesterday---and it's another offering from Roy Stephens.

A Brief History of Currency Wars -- Jim Rickards

There have been three currency wars in the past one hundred years. Currency War I covered the period from 1921 to 1936. It really started with the Weimar hyperinflation. There was period of successive currency devaluation.

In 1921, Germany destroyed its currency. In 1925, France, Belgium and others did the same thing. What was going on at that time prior to World War I in 1914? For a long time before that, the world had been on what’s called the classical gold standard. If you had a balance of payments, your deficit, you paid for it in gold.

If you had a balance of payment surplus, you acquired gold. Gold was the regulator of expansion or contraction of individual economies. You had to be productive, pursue your comparative advantage and have a good business environment to actually get some gold in the system — or at least avoid losing the gold you had. It was a very stable system that promoted enormous growth and low inflation.

That system was torn up in 1914 because countries needed to print money to fight World War I. When World War I was over and the world entered the early 1920s, countries wanted to go back to the gold standard but they didn’t quite know how to do it. There was a conference in Genoa, Italy, in 1922 where the problem was discussed.

This slightly longish, but must read commentary from Jim appeared on the dailyreckoning.com Internet site yesterday---and it's the final offering of the day from Dan Lazicki, for which I thank him on your behalf.

IMF warns global financial risks are rising

The International Monetary Fund (IMF) has urged countries to “safeguard” global financial stability following its report that financial risks are on the rise.

According to the IMF’s latest Global Financial Stability Report, since October 2014 financial risks have risen and rotated to parts of the financial system that are harder to assess.

It warned that risks had increased amid a “moderate and uneven” global economic recovery, with rates of inflation “too low” in many countries.

The IMF cited divergent growth and monetary policies as having increased tensions in global financial markets, resulting in “rapid and volatile moves” in exchange rates and interest rates over the past six months.

This very worthwhile article appeared on the ftadviser.com Internet site yesterday sometime

‘Three more banks’ to join ICE’s gold price benchmark

Three more banks are waiting in the wings to join ICE’s gold price benchmark, a well-informed source claimed, without disclosing their identities.

The banks will join JP Morgan Chase Bank, Scotiabank, HSBC, Société Générale, UBS, Barclays and Goldman Sachs in the LBMA Gold Price, which formally replaced the near-century-old London Gold Fix on March 20, bringing the number of participants to 10 once all the necessary formalities have been completed, the source said.

Many had been expecting some Chinese banks to be taking part in the new system when it launched, although some of the newer participants were reportedly struggling to meet both internal sign-offs and the paperwork required to join in time for the first auction.

Industrial and Commercial Bank of China (ICBC), one of the biggest banks in the world and a major participant in the gold market, is widely believed to be one of those interested.

This gold-related news item originally appeared on the bulliondesk.com Internet site on Wednesday---and it found a home over at the mineweb.com Internet site yesterday at 2:59 p.m. BST.

World Gold Council: Chinese Gold demand may shoot up 25 percent in coming years

According to the World Gold Council, gold demand in China, which overtook India as the largest user last year, will rise about 25 percent in the next four years as an increasing population gets wealthier.

Consumer demand will expand to at least 1,350 metric tonnes by 2017. Growth may be limited this year after 2013’s price decline spurred consumers to do more buying last year, it said. China accounted for about 28 percent of global usage last year, the council estimated in February, said the London-based World Gold Council.

One wonders from which central bank vaults this new gold demand will be coming from, because current physical demand exceeds world supply by a goodly bit already.  This short article, filed from Shanghai, appeared on the bullionstreet.com Internet site at 10:23 a.m. Friday morning India Standard Time---and it's definitely worth reading.

¤ The Funnies

¤ The Wrap

Not unexpectedly, for the first three days this week, another 2.3 million ounces were moved into the JPMorgan COMEX silver warehouse, bringing to nearly 6 million oz the total amount of silver flowing to this warehouse over the past six business days. [Plus another 1.19 million troy ounces on Thursday. - Ed]  If this isn’t directly related to JPM taking the maximum amount of silver allowed (7.5 million oz) in the March futures contract, then the moon isn’t directly related to the tides. As far as I’m concerned, enough metal has flowed to the JPM warehouse to establish the connection, but a bit more may come. [It has---another 1.19 million troy ounces were added on Thursday. - Ed]

Also, upon further review, I find it interesting that the 1,500 contracts that JPMorgan stopped (in its personal trading account) were the only silver deliveries made or taken by JPMorgan in its proprietary account this year (including the big December 2014 COMEX delivery month. I’m sure that JPMorgan holds a get-out-of-jail-free card from the CFTC (or higher agency) because after alleging for quite some time that JPMorgan was accumulating an historically massive physical silver holding over the past 4 years, one would think the bank might be somewhat more discreet than in suddenly taking the maximum amount and wave the red flag that might represent. I was certainly surprised that JPMorgan would appear that open and brazen (although I was very pleased to have it confirm my ongoing speculation), but I suppose that’s what get-out-of-jail cards are for.

I also took note that the investment bank Jefferies agreed to sell its Prudential Bache commodities unit for undisclosed (but obviously puny) terms after acquiring the unit with much fanfare (and for $430 million) four years ago. Jefferies has been one of the biggest issuers of silver deliveries on the COMEX, if not the biggest, since it announced it was buying the business in April 2011. (There we go with another unusual development dating to April 2011). I can’t know what impact Jefferies' exit from COMEX silver dealings will have on price, but it’s got to be better than any impact it had over the past 4 years. - Silver analyst Ted Butler: 15 April 2015

Yesterday's price action in the precious metals in the face of a dollar in the dumpster should give you some indication of the power that JPMorgan et al have in the COMEX futures market.  They can, as Ted Butler says, do whatever they want, whenever they want---and without fear of reprisal because of their "Get-Out-of-Jail-Free" card they were issued when they took over Bear Stearns.

How long this can go on remains to be seen, but what can be seen for sure is that they have total control over these or any other commodity that have to be "managed".

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

And as I type this paragraph, the London open is fifteen minutes away.  I see that the gold price poked its nose above the $1,200 spot mark in early Far East trading, however that wasn't allowed to last.  But starting at noon Hong Kong time on their Friday, gold began to rally anew---and is currently back above the $1,200 spot price, albeit by only a whisker.  It's the same price pattern for silver and platinum as well, so it's more than obvious that their respective prices are being micromanaged, as all three of these precious metals have different supply/demand fundamentals---and would never trade in unison like this in a free market.

Net gold volume is around 14,200 contracts, with 99.9 percent of it in the current front month, so it's all of the HFT variety.  The net volume in silver is barely fogging the mirror at 2,200 contracts, so not much should be read into their current price action, except for my comments on this issue in the previous paragraph.

The dollar index hasn't done a thing since it opened in New York yesterday evening---and is virtually unchanged, down 3 basis points.

I sent Jim Rickards the link to the story---"LSE's Lord Desai Warns Gold-Backed SDR Is Quite Likely to Happen"---which was the headline to my Thursday column---and asked for his opinion.  He got back to me last night about it---and here are his thoughts---"Thanks Ed. We're a long way from a gold-backed SDR. Next step is to include the Chinese yuan in the basket, probably late this year and early 2016. Then the IMF will sit tight until the next global liquidity crisis, at which point there will be massive issuance of new SDRs (in effect, world money from a world central bank). Only in the end stage when inflation breaks out and confidence in the SDR itself is threatened, will they move to gold in some form."

Today we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  Just eye-balling the above charts, I would guess that we'll see some sort of improvement in the Commercial net short position in both gold and silver---and particularly in silver, as "da boyz" took the silver price back below its 50-day moving average during the reporting week.  That got the Managed Money puking longs and maybe even going short---and we'll know by how much at 3:30 p.m. EDT this afternoon.  And this hangs on the assumption that all the trading volume during the reporting week was reported in a timely manner.

And as I send today's column off into cyberspace at 5:35 p.m. EDT, I note that once again gold, silver and platinum began to rally starting at noon Hong Kong time---and all three are up a bit from Thursday's close in New York.  Palladium isn't doing much, but it is up a dollar or so the ounce as well.

Net gold volume is around 26,800 contracts at the moment, which isn't overly heavy---and silver's net volume is around 5,700 contracts, which is very much on the lighter side considering the price activity in the last three and a half hours.

The dollar index has been trending lower---and like on Thursday, began heading lower in earnest shortly before the London open.  It's currently down 36 basis points.  The dollar index is down over 200 basis points in the last forty-eight hours, but JPMorgan et al certainly haven't been allowing it to show up in the precious metal prices---and based on yesterday's price action, one wonders how will they will be allowed to 'perform' once COMEX trading begins this morning.

Today we get the not-so-secret meeting in Washington between the World Gold Council and selected central banks---and that story is linked here if you wish to refresh your memory.  I'd love to be a fly on the wall at that one.

With all these balls in the air, I shan't hazard a guess as to how the remainder of the Friday trading session will turn out.  But at times like this I always hope for the best, but expect the worst---and as always, I'd like to be proven spectacularly wrong about the latter.

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, 17 Apr 2015 04:16:00 +0000
<![CDATA[LSE’s Lord Desai Warns: Gold-Backed SDR Is Quite Likely to Happen]]> http://www.caseyresearch.com/gsd/edition/lses-lord-desai-warns-gold-backed-sdr-is-quite-likely-to-happen/ http://www.caseyresearch.com/gsd/edition/lses-lord-desai-warns-gold-backed-sdr-is-quite-likely-to-happen/#When:04:26:00Z "It's the old-as-dirt 1 Percent Rule"

¤ Yesterday In Gold & Silver

In the broad strokes of Far East and early London trading, the gold price really didn't do a lot when all was said and done, even though I was making a big deal out of it in The Wrap in yesterday's column.  The low tick occurred on Wednesday morning in New York at the same time as it bottomed on Tuesday---8:30 a.m. EDT.  From there it rallied a decent amount until shortly after 2 p.m. in electronic trading---and it quietly sold off a few dollars going into the 5:15 p.m. close.

The low and and high ticks were recorded as $1,188.30 and $1,204.40 in the June contract.

Gold finished the Wednesday trading session at $1,201.50 spot, up $9.60 from Tuesday's close.  Net volume wasn't overly heavy at 116,000 contracts.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson.  The dark gray line is midnight EDT and, as usual, most of the price/volume action that mattered occurred during trading in New York.  Add two hours for EDT, as this chart is for Denver time---and the 'click to enlarge' feature is a must.

Silver's price during the Wednesday trading session followed a similar path's to gold and, once again, the charts are virtually interchangeable.

The low and high ticks were reported by the CME Group as $16.045 and $16.37 in the May contract.

Silver closed yesterday in New York at $16.305 spot, up 18 cents on the day.  Net volume was very light at only 23,500 contracts.

Platinum and palladium prices followed a somewhat similar chart pattern, except their respective lows came at the London p.m. gold fix.  Platinum closed at $1,160 spot, up ten dollars---and palladium finished the Wednesday session at $768 spot, up 6 bucks.  Here are the charts.

The dollar closed late on Tuesday afternoon in New York at 98.78---and made it to 99.04 by noon in Hong Kong, before selling off a bit.  Then twenty minutes before the London open---2:40 p.m. Hong Kong time---away it went to the upsides, topping out around 99.35 at 9:45 a.m. BST in London.  It was all down hill from there, with most of the damage occurring between 12:30 p.m. EDT---and the 1:30 p.m. COMEX close.  After that it traded flat for the remainder of the Wednesday session.  The dollar index closed at 98.40---which was down 38 basis points from Tuesday.

The gold stocks opened up a bit---and rallied until gold's high tick, which came minutes after 2 p.m. in New York---and they slid a hair from that point into the close.  The HUI finished up a respectable 3.42 percent]

It was the same story in the silver stocks, as Nick Laird's Intraday Silver Sentiment Index closed up 3.48 percent.

The CME Daily Delivery Report showed that 334 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The big short/issuer was HSBC USA with 333 contracts---and the two big long/stoppers were Canada's Scotiabank---and JPMorgan in its in-house [proprietary] trading account---with 171 and 161 contracts respectively.  Along with their obvious grab for every ounce of silver in any form they can lay their hands on, it appears that JPMorgan is now "going for gold" as well.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest for April dropped by 2 contracts---and is now down to 2,146 contracts, minus the 334 posted above for delivery tomorrow.  Silver's April o.i. dropped by 23 contracts---and is now down to 170 contracts still open.

There were no reported changes in GLD yesterday---and as of 9:28 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

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

There was no in/out activity in gold at the COMEX -approved depositories on Tuesday but, once again it was a different story in silver, as 1,073,627 troy ounces were reported received---and another 1,109,627 troy ounces were reported shipped out the door.  The largest withdrawal was from the CNT Depository---and it didn't quite match the almost identical number of ounces that were received by JPMorgan, which was the 1.073 million ounce number shown above.  You can check out all the silver action here.

Ted Butler mentioned in his mid-week column to paying subscribers yesterday that JPMorgan has take delivery of almost 6 million ounces of physical silver during the past week.  How much physical silver have you added to your own personal warehouse lately, dear reader???

Over at the 'gold kilo stock's COMEX-approved depositories in Hong Kong on Tuesday, Brink's, Inc. reported receiving 1,773 kilobars---and shipped out 1,377 of them.  The link to the troy ounces is here.

I have a decent number of stories for you today---and I hope you have the time to read the ones that most interest you.

¤ Critical Reads

U.S. Industrial Production Plunges By Most Since August 2012, Utility Output Drops Most in 9 Years

Mortgage apps tumble, Empire Fed slumps, and now Industrial Production plunges... Against expectations of a 0.3% drop MoM, U.S. Factory output was twice as bad at -0.6% - the worst since August 2012 (and almost worst since June 2009). This is the 4th miss in a row. What is even more stunning is that despite the coldest of cold winters that crashed the US economy, Utilities saw their output crash 5.9% - the most in 9 years (explained as follows - largely reversing a similarly-sized increase in February, which was related to unseasonably cold temperatures). Motor Vehicles saved the data from being a catastrophe with a 3.2% rise (following a 3.6% drop In Feb).

This brief Zero Hedge piece, with three excellent charts, appeared on their Internet site at 9:24 a.m. EDT on Wednesday morning---and I thank Dan Lazicki for today's first story.

JP Morgan and Wells Fargo profits offer mixed picture of state of U.S. banks

Two of the US’s largest banks released first-quarter results on Tuesday and gave a mixed picture of the state of the banking industry.

JP Morgan Chase, the US’s largest bank by assets, announced profits had risen by 12% over the quarter, due in part to strong trading results. Wells Fargo, the fourth-largest bank by assets but the largest mortgage lender, announced a dip in profits as it struggled to make money in lending.

JP Morgan reported a profit of $5.91bn, up from a profit of $5.27bn in the same period of 2014. Revenue rose 4.1% to $24.82bn. The numbers were better than analysts had predicted.

The results were powered by a strong performance from the bank’s traditional Wall Street businesses. Trading revenue increased 9% to $5.67bn from the first quarter. The bank also benefitted from the pick-up in mergers and acquisitions. Merger advisory revenue rose 42% from a year ago.

This article showed up on theguardian.com Internet site at 3:25 p.m. BST on Tuesday afternoon, which was 11:25 a.m. EDT.  I found it in yesterday's edition of the King Report.

I believe we have a moral obligation to starve the beast -- Simon Black

On August 5, 1861, facing rapidly deteriorating economic conditions and a horrible defeat at Bull Run, President Abraham Lincoln signed the Revenue Act of 1861 into law.

It was the first time in US history that the federal government would charge an income tax on its citizens. But Lincoln felt that it was vital to fund what would become one of the most unconscionably costly conflicts in US history.

The original law in 1861 set a flat tax rate of 3% on incomes above $800.

(Using the gold price as a benchmark, this is equivalent to 42.26 ounces, or roughly $50,500 in today’s dollars. Not that there’s any inflation.)

The income tax was tweaked occasionally throughout the war, and it lasted for a few years afterwards to help fund reconstruction.

This commentary by Simon appeared on the sovereignman.com Internet site yesterday, which was Tax Day in the U.S.

Your taxes have nothing to do with the government's need for money -- GATA

As this is federal and state tax deadline day in the United States, it's worth being reminded by Beardsley Ruml, the former chairman of the Federal Reserve Bank of New York and instigator of federal income tax withholding, that, in a fiat currency system, governments can create infinite money, that in doing so they are limited only by potential debasement of the currency, and that taxes thereby have nothing to do with raising revenue but rather are instruments of social policy and control.

Ruml's insightful observations were made in a speech he gave in May 1945 to the American Bar Association that was published in the January 1946 edition of the quarterly magazine American Affairs and headlined "Taxes for Revenue Are Obsolete."

"Final freedom from the domestic money market," Ruml wrote, "exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank and whose currency is not convertible into gold or into some other commodity. ..."

Ruml cautioned: "The public purpose which is served should never be obscured in a tax program under the mask of raising revenue."

This Tax Day commentary was posted on the gata.org Internet site yesterday---and both this article---and the Simon Black piece above are worth reading by all tax-paying citizens, American or otherwise.

Borderline U.S. Recession Equals Euro Short Cover -- Jim Rickards

This video interview with Jim took place on the BoomBust show on Russia Today on Tuesday.  The interview starts at the 14:05 minute mark---and runs for 8 minutes.  I thank Harold Jacobsen for bringing it to our attention.

A Powerful Weapon of Financial Warfare—The U.S. Treasury’s Kiss of Death

It’s an amazingly powerful weapon that only the U.S. government can wield—kicking anyone it doesn’t like out of the world’s U.S.-dollar-based financial system.

It’s a weapon foreign banks fear. A sound institution can be rendered insolvent at the flip of a switch that the U.S. government controls. It would be akin to an economic kiss of death. When applied to entire countries—such as the case with Iran—it’s like a nuclear attack on the country’s financial system.

That is because, thanks to the petrodollar regime, the U.S. dollar is still the world’s reserve currency, and that indirectly gives the US a choke hold on international trade.

For example, if a company in Italy wants to buy products made in India, the Indian seller probably will want to be paid in U.S. dollars. So the company in Italy first needs to purchase those dollars on the foreign exchange market. But it can’t do so without involving a bank that is permitted to operate in the U.S. And no such bank will cooperate if it finds that the Italian company is on any of Washington’s bad-boy lists.

This very worthwhile commentary appeared on the internationalman.com Internet site on Wednesday---and I thought it worth sharing.

Obama Yields, Allowing Congress Say on Iran Nuclear Deal

The White House relented on Tuesday and said President Obama would sign a compromise bill giving Congress a voice on the proposed nuclear accord with Iran as the Senate Foreign Relations Committee, in rare unanimous agreement, moved the legislation to the full Senate for a vote.

An unusual alliance of Republican opponents of the nuclear deal and some of Mr. Obama’s strongest Democratic supporters demanded a congressional role as international negotiators work to turn this month’s nuclear framework into a final deal by June 30. White House officials insisted they extracted crucial last-minute concessions. Republicans — and many Democrats — said the president simply got overrun.

“We’re involved here. We have to be involved here,” said Senator Benjamin L. Cardin of Maryland, the committee’s ranking Democrat, who served as a bridge between the White House and Republicans as they negotiated changes in the days before the committee’s vote on Tuesday. “Only Congress can change or permanently modify the sanctions regime.”

This news item, filed from Washington, put in an appearance on The New York Times website on Tuesday sometime---and it's the first contribution of the day from Roy Stephens.

Cuba has shown us that sanctions don’t work – so why keep using them? -- Simon Jenkins

The days are long gone when Labour was torn apart by ban the bomb. For the party leader, Ed Miliband, the Trident missile is what HS2 is for David Cameron. It is political tokenism, machismo, image candy. Am I big on defence, Miliband said to an interviewer. “Hell, yes.” Look at my weapons.

For Britain (and France), nuclear bombs are to foreign policy what Olympics are to proper sport: chauvinism bereft of intellectual justification or value for money. But what of weapons that actually hurt people? This week the United States was still refusing to lift economic sanctions on Cuba, even while admitting their failure for half a century to bring down the Castro regime. Indeed, the effect of sanctions is Cuba’s chief tourism appeal.

At the same time America and Britain are resisting Iran’s demand for sanctions to be lifted following the inspection of its nuclear plants this summer. In the case of Russia, pressure is on for sanctions to be tightened in response to Putin’s constant provocations along his western flank. They are the “something” that can always “be done”.

Sanctions remain in place against North Korea, Burma, Zimbabwe, Syria, Libya, Somalia, Congo and other weak and vulnerable states, irrespective of whether they achieve any policy goal. They have become the default mode of western diplomacy, the acceptable face of aggression, a casual flick of contempt by the rich against the poor.

This commentary by Simon appeared on theguardian.com Internet site at 6:09 p.m. BST on their Wednesday afternoon---and it's definitely worth reading.  I thank South African reader B.V. for his first of two contributions to today's column.

U.K. Deflation's not here yet - but that doesn't mean living costs aren't falling

Nothing to see here. The much heralded arrival of deflation failed to materialise this March. For a second month, there was no inflation, or deflation. We’re being told the U.K. is in ‘noflation’ instead.

The news might be something of a blessing for David Cameron, the Prime Minister, as the reading is the last we’ll see from the Office for National Statistics (ONS) before polls open in May.

It means the Conservatives will be spared potentially damaging headlines warning of the ills of negative inflation, which could corrupt its core message of economic competence.

Some commentators will highlight the unrounded figures, which showed the U.K. edged into deflationary territory by the slimmest of margins - with the CPI down 0.01pc in the period. But it’s nonsense to suggest that the ONS’ estimates can be this accurate.

This commentary showed up on the telegraph.co.uk Internet site at 3:29 p.m. British Summer Time on Tuesday---and it's the second story in a row from reader B.V.

German 10 Year Bond Yield Plunges to 10bps, Negative to 8 Years

German yields cratered today (as DAX flash-crashed into the close). 10Y yields are now at 10.5bps - record lows - and the entire German yield curve is now at negative rates to 8 year maturity. 3-Month German bills hit -42bps!! Must all be a signal of the economic success of Q€ right?

This tiny Zero Hedge story, with two must see charts, was posted on their website at 12:21 p.m. Wednesday afternoon EDT---and I thank Dan Lazicki for sending it our way.

Germans downbeat on chances of Greek deal next week

Germany's finance minister said on Wednesday there was no prospect of the euro zone reaching a deal with Athens next week on economic reforms that would unlock bailout funds, potentially leaving Greece perilously short of money.

Both the Greek government and its creditors have said they need to reach at least an outline agreement at an April 24 meeting of euro zone finance ministers in Latvia's capital Riga.

But Athens, which has signaled it may not have enough cash to keep up payments to international creditors in May, has yet to produce a program of reforms that is deemed acceptable.

German Finance Minister Wolfgang Schaeuble told the Council on Foreign Relations in New York that no one expected a deal at the Riga meeting or in the coming weeks.

This Reuters article, co-filed from New York and Athens---showed up on the news.yahoo.com Internet site early yesterday afternoon---and it's courtesy of Orlando, Florida reader Dennis Mong.

Greek banks tap more ELA funds in March as deposits drop

Greek banks made more use of so-called emergency liquidity assistance (ELA) in March, increasing their borrowing by 4.4 percent from the previous month as an outflow of deposits continued, Bank of Greece data showed on Wednesday.

Banks switched to using ELA, provided by the Greek central bank, in February after being cut off from the ECB's funding window after the new government stalled the country's bailout program - a condition for access to direct ECB funding.

Emergency funding from the Greek central bank, which is more costly than borrowing from the European Central Bank, rose to 68.51 billion euros ($72.6 billion) last month from 65.64 billion in February, the data showed.

Banks suffered deposit outflows of 24 billion euros over December to February as jitters over the government's standoff with euro zone partners on required reforms prompted savers to withdraw cash to stash at home or to send abroad.

This is another Reuters article, also filed from Athens---and it appeared on the news.yahoo.com Internet site around noon EDT on Wednesday---and it's also courtesy Dennis Mong.

Ahead Of Varoufakis' Meeting With Famous Sovereign Bankruptcy Lawyer S&P Downgrades Greece To CCC+

To think it was just recently in September of last year when the S&P, seemingly unaware of the tragic reality facing Greece in just a few months (by reality we mean democratic elections which overthrew the previous regime which was merely a group of Troika picked technocrats), upgraded Greece to B and said "The upgrade reflects our view that risks to fiscal consolidation in Greece have abated."

Well, the risks have unabated, and two months after S&P flip-flopped and downgraded Greece back to B- on February 6, moments ago it downgraded it again, this time to triple hooks, aka the dreaded CCC+.

S&P said that without deep economic reform or further relief, S&P expects Greece’s debt, other financial commitments to be unsustainable. S&P views that Greece increasingly depends on favorable business, financial, and economic conditions to meet its financial commitments.

But, as City AM reports, the biggest news is that the Greek Finance Minister "will on Friday meet with infamous sovereign debt lawyer Lee Buchheit, who has helped numerous countries restructure their debt. Buchheit is a partner at top US law firm Cleary Gottlieb."

This Greece-related article was posted on the Zero Hedge website at 12:10 p.m. EDT yesterday afternoon.

"Why do they keep shooting?" Violence spikes in East Ukraine, OSCE blames Kiev forces

The latest OSCE mission report on the Ukrainian conflict has recorded a spike in violence, with monitors largely blaming Kiev. However, RT’s correspondent says the shooting pales in comparison to what locals went through before the Minsk deal.

“By and large, the ceasefire is holding,” RT’s Murad Gazdiev reports from the Donetsk region in eastern Ukraine. “The exchanges are a shadow of what they were before the Minsk deal took hold.”

Military action between the Ukrainian troops and the self-defense fighters has renewed in the vicinity of Shirokino, following intense strikes from Kiev’s military, the daily report by Organization for Security and Co-operation in Europe (OSCE) stated on Tuesday.

On April 11, monitors witnessed “an escalation of hostilities, with a tank round being fired and small-arms and machine-gun fire exchange between forces in government-controlled [town of] Berdyansk and Shirokino [village].”

This Russia Today news item put in an appearance on their Internet site at 3:43 p.m. Moscow time on their Wednesday afternoon, which was 8:43 a.m. EDT in Washington.  I thank Jim Skinner for digging it up for us.

U.S. Soldiers, Back in Iraq, Find Security Forces in Disrepair

Lt. Col. John Schwemmer is here for his sixth Iraq deployment. Maj. James Modlin is on his fourth. Sgt. Maj. Thomas Foos? “It’s so many, I would rather not say. Sir.

These soldiers are among 300 from the 5-73 Squadron of the 82nd Airborne Division of the United States Army, about half of them trainers, the rest support and force protection. Stationed at this old Iraqi military base 20 miles north of Baghdad, they are as close as it gets to American boots on the ground in Iraq.

Back now for the first time since the United States left in 2011, none of them thought they would be here again, let alone return to find the Iraqi Army they had once trained in such disrepair.

Colonel Schwemmer said he was stunned at the state in which he found the Iraqi soldiers when he arrived here. “It’s pretty incredible,” he said. “I was kind of surprised. What training did they have after we left?

Apparently, not much. The current, woeful state of the Iraqi military raises the question not so much of whether the Americans left too soon, but whether a new round of deployments for training will have any more effect than the last.

This essay was posted on The New York Times website on Wednesday---and my thanks go out to Ken Hurt for bringing it to our attention.

Saudi Arabia Leads OPEC Oil Boom as U.S. Shale Growth Slows

Saudi Arabia pumped close to a record amount of crude oil last month, leading the biggest surge in OPEC output in almost four years just as the U.S. shale boom shows signs of slowing, the International Energy Agency said.

The Organization of Petroleum Exporting Countries may extend its biggest output gain since June 2011 into next month as recovery in Libya and Iraq adds to the Saudi increase, the IEA said. Average U.S. oil production of 12.6 million barrels a day in the first six months of 2015 will slide to 12.5 million by the fourth quarter as companies curb drilling, the agency said.

Oil prices are about 45 percent lower than a year ago as OPEC keeps output elevated in response to booming shale production and rising Russian supplies. While the U.S. will still pump an extra 710,000 barrels a day of oil this year, unprecedented reductions in drilling mean growth will be about 25 percent lower than the IEA projected in November, before OPEC embarked on its policy to defend market share.

“OPEC’s core Gulf producers -- led by Saudi Arabia -- appear to be sticking with their defense of market share,” the Paris-based adviser to 29 nations said in its monthly oil-market report. “Lower oil prices and cuts in capex are starting to take their toll” on U.S. production.

This oil-related news item appeared on the Bloomberg website at 2:00 a.m. Denver time on Wednesday morning---and I thank West Virginia reader Elliot Simon for digging it up for us.

The Collapse of the Petrodollar: Oil Exporters Are Dumping U.S. Assets at a Record Pace

Back in November we chronicled the (quiet) death of the Petrodollar, the system that has buttressed USD hegemony for decades by ensuring that oil producers recycled their dollar proceeds into still more USD assets creating a very convenient (if your printing press mints dollars) self-fulfilling prophecy that has effectively underwritten the dollar’s reserve status in the post WWII era. Here’s what we said last year:

Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company - the end of the system that according to many has framed and facilitated the US Dollar's reserve currency status: the Petrodollar, or the world in which oil export countries would recycle the dollars they received in exchange for their oil exports, by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one held U.S.-denominated assets and printed U.S. currency) loop...

Few would have believed that the Petrodollar did indeed quietly die, although ironically, without much input from either Russia or China, and paradoxically, mostly as a result of the actions of none other than the Fed itself, with its strong dollar policy, and to a lesser extent Saudi Arabia too, which by glutting the world with crude, first intended to crush Putin, and subsequently, to take out the US crude cost-curve, may have Plaxico'ed both itself, and its closest Petrodollar trading partner, the U.S. of A.

As Reuters reports, for the first time in almost two decades, energy-exporting countries are set to pull their "petrodollars" out of world markets this year.

This very interesting Zero Hedge piece was posted on their Internet site with a time-line of 10:42 p.m. last night EDT---and it has obviously been edited, because Dan Lazicki sent it to me six hours before that.

Stanley Druckenmiller Bullish Chinese Equities and Oil and Doesn’t Expect Rate Cut Anytime Soon

The economy appears to be full of surprises, according to billionaire investor Stanley Druckenmiller. He has one of the best long-term track records in money management and he’s planning for the unexpected.

Most investors predict the Federal Reserve to raise interest rates in September, after keeping them near zero for six years. But Druckenmiller rejects that forecast.

I have no confidence whatsoever that we’ll see a rate hike in September or December,” says Druckenmiller, who is worth $4.4 billion according to the Bloomberg Billionaires Index.

And there are other surprises. He expects oil prices will rise and the Chinese will be smiling with an improving economy. Chinese leaders are forecasting growth this year of 7 percent. That’s the lowest in 7 years, but the Shanghai Composite Index has doubled in the last 12 months as Chinese stocks have soared.

This item appeared on the Zero Hedge website at 4:20 p.m. EDT---and it's the final contribution of the day from Dan Lazicki, for which I thank him.

China accepts 57 founding members for new Asian Infrastructure Investment Bank

China-led Asian Infrastructure Investment Bank finalized a list of 57 founding member states on Wednesday.

The announcement came after China accepted the last group of nations that includes Sweden, Israel, Poland and South Africa, reported The South China Morning Post.

Founding members have the right to establish the rules for the bank's activities. They hold other privileges that will not be available to countries that may opt to join the bank at a later point.

The United States and Japan have abstained from joining the AIIB, but South Korea, a key U.S. ally in the region, has agreed to join as a founding member along with Australia, New Zealand, Canada, Britain, France and Germany.

This UPI news story, filed from Beijing, appeared on their website yesterday---and it's worth reading.  I thank Roy Stephens for finding it for us.

The Gold Chronicles: April 9, 2015 Interview with Jim Rickards

This 56:08 minute audio interview covers the entire range of topics that Jim always spends time on and, as usual, his comments regarding gold come towards the end.

As the headline says, the interview was conducted on April 9---and was posted on the physicalgoldfund.com Internet site yesterday.  I thank Harold Jacobsen for sending it our way.

Asian demand turns Massachusetts into major gold exporter

Massachusetts' top export is not sleek medical devices, cutting-edge machinery, or life-saving pharmaceuticals. It is something more intriguing: gold.

In a state devoid of gold mines, Massachusetts exported nearly $2 billion in gold last year to places such as the United Kingdom, Switzerland, and Hong Kong, according to WiserTrade.org, a Leverett trade research group. And these were not paper transactions but 62,500 pounds of the glittery metal -- roughly the weight of a herd of more than two dozen rhinoceros.

But exactly who is exporting this gold has stumped even specialists studying the Massachusetts economy, who can talk knowledgeably about almost any product that leaves the state, from semiconductors to seafood to colon cancer tests.

As it turns out, much of the gold leaving the state appears to be just passing through. In 2014, Massachusetts was not only the nation's fifth-largest gold exporter but also its fourth-largest importer, accepting about $1.5 billion from countries such as Canada, Colombia, and Mexico.

This interesting gold-related story put in an appearance on the bostonglobe.com Internet site on Tuesday---and I found it embedded in a GATA release yesterday.

Record dive recovers $50 million in wartime silver from ocean floor

In the deepest salvage operation in history, a British-led team has recovered a $50 million (£34 million, €47 million) trove of coins that has lain on the seabed since the steamship carrying them from Bombay to England was sunk in 1942.

The S.S. City of Cairo was torpedoed 480 miles south of St. Helena by a German U-boat and sank to 5,150 meters. Its precious cargo -- 100 tonnes of silver coins -- belonged to HM Treasury. The silver rupees had been called in by London to help fund the war effort.

But they never made it. The steamship's tall plume of smoke was spotted by a U-boat on 6 November 1942 and it was torpedoed.

Ten minutes later, amid efforts to abandon ship, the City of Cairo was hit with a second torpedo which sealed its fate.

The ship and its cargo was presumed lost until 2011, when a team led by British salvage expert John Kingsford located an unnatural object among the ridges and canyons of their South Atlantic search area.

This very interesting article showed up on the bbc.com Internet site yesterday---and it's another story I found posted on the gata.org Internet site.

John Embry Interviewed on Goldseek.com Radio

This 13:17 minute audio interview with John appeared on the goldseek.com website yesterday sometime---and I thank reader Dennis Meredith for bringing it to my attention---and now to yours.

LSE’s Lord Desai Warns: Gold-Backed SDR Is Quite Likely to Happen

As many are increasingly coming to terms with the ‘obvious failure of fiat currency’, the inevitable question arises “what next?” Earlier this year, we discussed the possibility of a Chinese- or Russian-currency backed by gold, amid the increasing calls (domestically and abroad) for an end to USD Reserve hegemony; but this weekend, as Bloomberg reports, Lord Meghnad Desai, chairman of The Official Monetary and Financial Institutions Forum, stated that IMF Special Drawing Rights (SDR) should contain some gold to help stabilize the currency.

As Bloomberg reports,

A bit of gold” could help stabilize SDRs, Lord Meghnad Desai, chairman of Official Monetary and Financial Institutions Forum, says at precious metals conference in Dubai."

We could ask that gold be nominated as part of the SDR. That is one thing I think is quite likely to happen

This will be easier if China increases its official gold holdings.

A subject near and dear to Jim Rickards' heart.  This absolute must read article, which was originally posted on Zero Hedge, appeared on the etfdailynews.com Internet site on Tuesday sometime---and I found it on the Sharps Pixley website yesterday.

¤ The Funnies

The Oldest Bird in the Northern Hemisphere Raises a Chick

Below is a photo of "Wisdom".  She's a female Laysan albatross---and was first banded by USGS scientist Chandler Robbins in 1956 as she was incubating an egg.  This is a picture of her brooding her month-old chick on Midway Island in early March of 2011.  Since then, she has raised another chick on Midway Atoll, this time in 2014.  These birds must be at least five years old before they're capable of breeding, but they more typically breed at 8 or 9 after an involved courtship lasting several years.

So, assuming the egg she was sitting on in 1956 was her first one, and that's no guarantee---and adding eight years to that, you come out with a hatching date for Wisdom somewhere in very early 1948.  That means that when she raised her latest chick in 2014 she was 65 years old.

I was born in October of 1948---so it's a near certainty that Wisdom is older than I am.

The photo credit belongs to John Klavitter---and you can read more about Wisdom here.  If you want to follow these birds from egg to adult, there's live webcam for that linked here---and I have it on audio background to listen to the adult birds as they carry on until the sun sets in Kau'i in the Hawai'ian Islands, where a small portion of this years brood is currently being raised.











¤ The Wrap

Along with the growing awareness of the COT report and what that portends for the termination of the manipulation, there are other strong signs that even those not well versed on the intricacies of the report are seeing that something is very wrong with the price discovery process in silver. Back in the fall, the CEO of silver miner First Majestic, Keith Neumeyer, made waves when he suggested the price of silver was too low and openly suggested that silver miners band together to restrict production to counterbalance what he thought was too low of a silver price. I remember writing about it at the time and both congratulated and encouraged Mr. Neumeyer to continue pursuing the artificial pricing issue in silver, but to shy away from attempting to form a producers’ cartel as that appeared to be against antitrust law. While silver is clearly manipulated in price, you shouldn’t try to manipulate it higher – two wrongs don’t make a right and all that.

I hadn’t heard much from Mr. Neumeyer on the artificial pricing of silver since then, so I was somewhat surprised when I ran across a very recent interview in which he discussed his opinions in straightforward terms. He questioned the price discovery process for silver on the COMEX and characterized the process in terms that should be familiar to anyone reading these pages. In the interest of time and to drill down to the price discovery discussion, you can fast forward to the 21:25 minute mark.

The important point is that here we have the CEO of an important primary silver producer deeply questioning how silver prices are derived. According to Mr. Neumeyer, actual supply and demand have little to do with current silver prices and I, for one, would not argue with him. Although Mr. Neumeyer, much to his credit, has spoken to the issue of artificial pricing in silver previously, I must point out just how rare and unusual it has been for a primary silver miner to raise such concerns over the past 30 years in which I have alleged a COMEX silver manipulation has existed. I’m still shaking my head in disbelief that silver miners heretofore always denied prices were manipulated, even though their shareholders were obvious victims, but I am more encouraged by Neumeyer’s words than anything else.

Taken with the growing attention being placed upon the COT Report and the Managed Money category, Mr. Neumeyer’s sentiments are reason to believe the ongoing silver manipulation is on its last legs. It’s hard to run any scam where the scam becomes common knowledge. I’ve always maintained that in matters related to the price of silver, all roads lead to the COMEX. I would revise that to all silver roads lead to the COMEX and JPMorgan, but that is a distinction without a real difference.  I actually look forward to the day when someone admits that paper speculators on the COMEX do set and have every right to set the price of silver and that actual producers should butt out and be happy with the prices given to them by the speculators. It has become nearly that crazy. - Silver Analyst Ted Butler: 15 April 2015

I was certainly happy to see the precious metal price action when I got up yesterday morning, but it was far from the spectacular variety, as gold wasn't even allowed to rise one percent.  It's the old-as-dirt "1 Percent Rule" that my compatriot GATA Chairman Bill Murphy over at lemetropolecafe.com likes to mention at moments like this---and he'd be right on the money once again.

Here are the updated 6-month charts for all four precious metals once again---and the charts, as usual, are courtesy of stockcharts.com.

And as I write this paragraph, the London open is five minutes away.  Three of the four precious metals are in positive territory---and only palladium is down on the day, but only by a buck.  Net gold volume is already sky high at 36,000 contracts---and silver's net volume is a hair over 4,000 contracts.  The dollar index, which got smoked at 8:00 a.m. Hong Kong time on their Thursday morning, has now rallied back into positive territory---and is currently up 9 basis points.

I would guess that a lot of yesterday's price action was currency related, but not all of it.  Behind all of this is a precious metal market that would explode in price to the outer edges of the known universe if given the opportunity.  Someday it will, but it wasn't yesterday.

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT, I note that gold rallied a bit more going into the London open, but appears to have been capped [at least for the moment] as of 9:00 a.m. BST.  Whether that was the end of it all, or there's more rally to come, is hard to say---so we'll have to see what the rest of the Thursday session brings, especially the New York session.

It's the same chart pattern in both silver and palladium as well---and palladium is still chopping sideways, a dollar or so either side of unchanged.

Net gold volume is just north of 52,000 contracts---and it's fairly obvious that this Far East/early London gold rally has run into pretty impressive resistance from "da boyz".  Silver's net volume is around 5,800 contracts, which isn't a lot---and a decent amount is roll overs as well.  The dollar index is now up 25 basis points in an almost straight-line move from its 8 a.m. Hong Kong low.

It beats the hell out of me as to how the rest of the Thursday trading session will unfold---and after yesterday's price action, it's probably best that I make no prediction at all, and let the chips fall where they may.

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

Ed Steer

]]>
Thu, 16 Apr 2015 04:26:00 +0000
<![CDATA[Hedge Funds/Managed Money Double Bullish Gold Price Bets]]> http://www.caseyresearch.com/gsd/edition/hedge-funds-managed-money-double-bullish-gold-price-bets/ http://www.caseyresearch.com/gsd/edition/hedge-funds-managed-money-double-bullish-gold-price-bets/#When:04:16:00Z "More slices off the salamis once again"

¤ Yesterday In Gold & Silver

The gold price managed to creep back to the $1,200 spot mark in early Far East trading on their Tuesday morning---and that lasted until noon in Hong Kong.  At that point the HFT boyz showed up---and it was all down hill into the release of the retail sales numbers shortly before 8:30 a.m. EDT.

The dollar index crashed---and gold, along with the other precious metals, moved higher.  But their respective rallies were met with whatever selling it took to cap the price---and gold didn't even make it back to $1,200 spot.  Once London closed at 11:00 a.m. EDT, JPMorgan et al had the gold price back in the box by 12:30 p.m. in New York---and it traded almost ruler flat into the close.

The high and low ticks were recorded by the CME Group as $1,201.30 and $1,183.50 in the June contract.

Gold finished the Tuesday session in New York at $1,191.90 spot, down another $6.10 from Monday's close.  Net volume was very decent at 150,000 contracts, which was about 50 percent more than Monday's volume.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson.  Midnight EDT, noon Hong Kong time, is the dark gray line---and you can see the big volume spikes on the rallies after the retail sales numbers were released on Tuesday morning in New York.  It's easy to spot the New York high at the London close---and subsequent sell-off until 12:30 p.m. EDT, which is 10:30 a.m. MDT on this chart.  Add 2 hours for EDT---and the 'click to enlarge' feature is a must.

The Kitco silver price chart was a spittin' image of the gold chart---and you can just reread the first two paragraphs about gold above---and substitute the word silver every time I use the 'gold' word.  Nothing free market about that, but you should be used to that by now.

The high and low were recorded as $16.34 and $15.955 in the May contract.

Silver finished the Tuesday session at $16.125 spot, down 13 cents from Monday.  Net volume was 32,000 contracts, close to 50 percent higher than it was on Monday, but about average when one considers the daily volume from last week.

The platinum chart was basically the same as gold and silver's as well---and once JPMorgan et al capped the price after the London close, it finished the Tuesday session unchanged at $1,150 spot.

The chart for palladium was a mini version of the above three charts and, like gold and silver, it was closed down on the day, finishing the Tuesday session at $762 spot, down 6 dollars.

The dollar index closed late on Monday afternoon in New York at 99.50---and after selling off a hair in the first couple of hours of Far East trading, rallied to its 99.67 high around 2:30 p.m. Hong Kong time.  From there it slid about 15 basis points over the next six hours going into the retail sales numbers, before falling off the proverbial cliff, with the 98.40 low tick being printed around 10:35 a.m. EDT.  From there it rallied until about 2:30 p.m., before it traded more or less sideways into the close.  The dollar index finished the Tuesday session at 98.78---down 72 basis points from Monday's close.

You will carefully note the dollar index and the precious metals were not trading in sync between noon in Hong Kong---and when the retail sales numbers were released---and then it was obvious that precious metal prices were capped after that.

Despite the fact that the gold price was well managed yesterday, their shares opened up---and stayed up.  Their highs came shortly before 11 a.m. EDT---and then they quietly sold down until about 2:10 p.m.---and then they rallied equally as quietly into the close.  The HUI finished the Tuesday session up 1.29 percent.

The trading pattern for the silver equities was very similar, except they didn't do quite as well, as Nick Laird's Intraday Silver Sentiment Index closed up only 0.39 percent.

The CME Daily Delivery Report showed that 2 gold and 23 silver contracts were posted for delivery on Thursday.  In silver, Jefferies was the short/issuer out of it proprietary trading account---and Canada's Scotiabank stopped 22 of them. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that a further 250 contracts of April open interest in gold vanished yesterday---and the o.i. for the month is now down to 2,148 contracts.  Silver added another 18 contracts to its April open interest---and April o.i. now sits at 193 contracts.

There was another deposit in GLD yesterday.  This time an authorized participant added 57,568 troy ounces.  There have been three withdrawals and two deposits in GLD in April---and this ETF now holds about 37,000 troy ounces less than it started the month with.  And as of 9:33 p.m. EDT, there were no reported changes in SLV.

It was another down week for both gold and silver ETFs at Switzerland's Zürcher Kantonalbank for the week ending Friday, April 10---as their gold ETF had a withdrawal of 24,382 troy ounces---and their silver ETF sold off a chunky 610,872 troy ounces.

There was a very decent sales report from the U.S. Mint yesterday.  They sold 4,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and another 440,000 silver eagles.

And still not a peep out of the Royal Canadian Mint---and its 2014 annual report.

Over at the COMEX-approved depositories on Monday, they reported receiving 32,161 troy ounces of gold, all of which went into the vaults over at HSBC USA---and nothing was shipped out.  The link to that activity is here.

In silver, only 1,966 troy ounces were received, but a very chunky 1,226,696 troy ounces were shipped out the door for parts unknown.  The big withdrawal was from the CNT Depository---and the link to that action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong---Brink's, Inc. reported receiving 5,596 kilobars---and shipped out 3,990 kilobars.  The link to that activity in troy ounces is here.

I received an e-mail from reader John Bastion on Monday---and he informed me that two Canadian-based closed-end precious metal mutual funds are in the process of being raided by a Cayman Islands-based hedge fund called North Pole Capital Master Fund.  The two mutual funds in question are Central GoldTrust and Silver Bullion Trust---and both are manged by Stefan Spicer et al of Central Fund of Canada fame.

I spent a decent amount of time on the phone with Stephan yesterday, as I'd met both him and his father at one of the late Jim Blanchard's Investment Conferences in New Orleans about ten years ago.

What he had to say yesterday was not only interesting, but very alarming as well---and if you have a position in either of these funds, spending some time on this issue is an absolute must.  The link to the information at the Central GoldTrust website is here---and just click on the "YES" box when you hit the landing page---and you'll end up on the home page immediately.

Similar information will be posted on the silverbulliontrust.com website within a week or so, but you can read the recent press releases on this issue by clicking here.

I don't have all that many stories for you today---and I hope you find a few in here that you like.

¤ Critical Reads

Retail Sales Miss For 4th Month in a Row: First Time Since Lehman

After 3 months of missed expectations and the first consecutive drop in retail sales since Lehman, retail sales rose 0.9% in March (missing expectations of +1.1%), following a revised 0.5% drop in February. While the 0.9% rise is the biggest since March last year, this is now the worst streak of missed expectations in retail sales since 2008/9. Ex-Autos, retail sales also missed expectations (rising just 0.4% vs 0.7% expected).

This is the worst March YoY growth in retail sales (control group) since 2009...

This chart-filled Zero Hedge piece appeared on their Internet site at 8:35 a.m. EDT on Tuesday morning---and today's first story is courtesy of Dan Lazicki.

Small Business Optimism Plunges to 9-Month Lows as Hiring Plans Tumble

Remember back at the turn of the year when NFIB Small Business Optimism was surging and the mainstream media proclaimed that jobs were coming back thanks to small business, and Obama stated "the shadow of crisis is behind us." Well, if March's Small Business Optimism index is to be believed... it's not. At 95.2 (missing expectations for the 3rd month in a row), this is the least optimistic small businesses have been in 9 months. Worse still, all those jobs that were going to be created by this optimism.  Hiring Plans dropped to 6-month lows.

This is another article from the Zero Hedge Internet site yesterday morning---and it's very much on the tiny side, with two embedded must see charts.  It's the second offering in a row from Dan Lazicki.

U.S. Q1 GDP Expectations Are Crashing

In just six short months, expectations for U.S. economic growth in Q1 2015 has been slashed by more than half (from 'trend' 3% to a mere 1.4% growth this week). While consensus is still well above the Atlanta Fed's 0.1% forecast, the sell-side is rapidly being forced to admit it's not just the weather...

GDP growth is collapsing---and the bounces in forward earnings and U.S. macro data are stalling once again...

This is another brief Zero Hedge piece from Dan Lazicki.  This one contains three charts---and they're definitely worth a look.  They appeared on their website at 2:30 p.m. EDT yesterday afternoon.

The Strong Dollar Could Turn on a Dime -- Jim Rickards

Today’s currency war started in 2010. My first book, Currency Wars came out a little bit after that. One of the points that I made in the book is that the world is not always in a currency war but when we are, they can last for a very long time. They can last for five, ten, or even fifteen years — sometimes longer.

It’s really not a surprise that here we are in 2015 talking about currency wars because it’s the same currency war. A lot of what you read or see on the TV will be some policy move by, let’s say, Japan, to weaken the yen. And reporters will say: “There’s a currency war going on”, or “There’s a new currency war.” I just roll my eyes a little bit and think to myself, “No, this is the same currency war; it’s just a new phase or new battle.”

Currency wars have a lot of explanatory power — in fact, they’re one of the most important things going on in economics today. I fully expect that a year from now, we’ll still be talking about it.

This commentary by Jim showed up on the dailyreckoning.com Internet site on Monday---and I thank West Virginia reader Elliot Simon for sharing it with us.

Ackman Says Student Loans Are the Biggest Risk in the Credit Market

Bill Ackman says the biggest risk in the credit market is student loans.

“If you think about the trillion dollars of student loans we have outstanding, there’s no way students are going to pay it back,” Ackman, who runs $20 billion Pershing Square Capital Management, said today at 13D Monitor’s Active-Passive Investor Summit in New York.

The balance of student loans outstanding in the U.S. -- also including private loans without government guarantees -- swelled to $1.3 trillion as of the second quarter 2014, based on data released by the Federal Reserve in October. The rising level has prompted investors and government officials to draw parallels to the subprime mortgage market before housing collapsed starting in 2006.

About $100 billion of federal student loans are in default, 9 percent of outstanding balances, according to a Treasury Borrowing Advisory Committee update on student lending trends released in November.

This Bloomberg news item put in an appearance on their Internet site at 3:41 p.m. EDT Denver time on Monday afternoon---and it's the second offering in a row from Elliot Simon.

IMF fears 'cascade' of woes as Fed crunch nears

The United States is poised to raise rates much more sharply than markets expect, risking a potential storm for global asset prices and a dollar shock for much of the developing world, the International Monetary Fund has warned.

The IMF fears a "cascade of disruptive adjustments" as the US Federal Reserve finally pulls the trigger for the first time in eight years, ending an era of cheap and abundant dollar liquidity for the international system.

The Fed's long-feared inflexion point is doubly treacherous because investors seem ill-prepared for what lies ahead, and levels of dollar debt outside the US have reached an unprecedented extreme. The Fund said future contracts are pricing in a "much slower" pace of monetary tightening than the Fed itself is forecasting.

This Ambrose Evans-Pritchard offering appeared on The Telegraph's website at 4:19 p.m. BST yesterday afternoon---and it's the first contribution of the day from Roy Stephens.

Florida Ex-Senator Pursues Claims of Saudi Ties to 9/11 Attacks

Mr. Graham, 78, a two-term governor of Florida and three-term senator who left Capitol Hill in 2005, says he will not relent in his efforts to force the government to make public a secret section of a congressional review he helped write — one that, by many accounts, implicates Saudi citizens in helping the hijackers.

“No. 1, I think the American people deserve to know the truth of what has happened in their name,” said Mr. Graham, who was a co-chairman of the 2002 joint congressional inquiry into the terrorist attacks. “No. 2 is justice for these family members who have suffered such loss and thus far have been frustrated largely by the U.S. government in their efforts to get some compensation.”

He also says national security implications are at stake, suggesting that since Saudi officials were not held accountable for Sept. 11 they have not been restrained in backing a spread of Islamic extremism that threatens United States interests. Saudi leaders have long denied any connection to Sept. 11.

The "official" version of 9/11---the U.S. government fairy story that just won't go away---and for very good reason, as intelligent people keep asking embarrassing questions that obviously have answers that are equally as embarrassing.  This essay appeared on The New York Times website [of all places] on Monday---and is definitely worth reading.  I found it in yesterday's edition of the King Report.

IMF: oil price collapse will cripple North Sea producers

Britain's oil industry faces a deep and long-lasting crisis, according to the International Monetary Fund, which said the collapse in oil prices would stifle investment and hit production at a much faster pace than other countries.

Analysis by the IMF and Rystad Energy showed North Sea oil producers would be among the hardest hit by the slump in prices because huge operating costs meant they could not absorb the decline as easily as countries such as Kuwait, Iraq and Saudi Arabia.

"Canada, the North Sea, and the United Kingdom are among the most expensive places to operate oil fields. As a result, the oil price slump will affect production in those locations earlier and more intensely than in other locations," the IMF said in its World Economic Outlook.

This article was posted on the telegraph.co.uk Internet site at 2:14 p.m. BST yesterday afternoon, which was 9:14 a.m. in Washington.  I thank South African reader B.V. for sending it our way.

Banks Across Europe Pay Borrowers to Buy Homes

Back in January we asked the following: “who will be the first to offer a negative rate mortgage?” Soon thereafter we discovered that in fact, this NIRP-inspired aberration already existed in Denmark where Nordea Credit was offering to pay borrowers to purchase a house prompting us to make the following assessment: And just like that, first in Denmark, and soon everywhere else in Europe, a situation has now emerged where savers who pay the bank to hold their cash courtesy of negative deposit rates, are directly funding the negative interest rate paid to those who wish to take out debt. In fact, the more debt the greater the saver-subsidized windfall.

That would turn out to prove rather prescient because as The Wall Street Journal reports, this bizarre characteristic of the new paranormal is spreading throughout Europe on the back of Mario Draghi’s trillion-euro adventure in debt monetization land.

"Tumbling interest rates in Europe have put some banks in an inconceivable position: owing money on loans to borrowers."

This is insanity---and it won't last.  Reader B.V. found this story on the Zero Hedge website yesterday---and it was posted there at 10:55 a.m. EDT Tuesday morning.

Varoufakis sets up date with Obama to break Greece's debt stalemate

Greece's finance minister Yanis Varoufakis is due to meet President Barack Obama on Thursday, in a sign that Athens is appealing to the highest levels of international diplomacy to secure its future in the eurozone.

Mr Obama has previously indicated his support for the Leftist government, calling for a fast and equitable solution to the country's debt crisis.

"You cannot keep on squeezing countries that are in the midst of depression," the U.S. president said in February following Syriza's election victory.

The visit comes amidst a growing stalemate between the Greek government and eurozone creditors, with officials at the International Monetary Fund privately voicing doubts about the country's continued membership of the eurozone.

According to reports in Greek media, Poul Thomsen, the IMF's Europe director told his executive board that negotiations were "not working" and he could not envisage a successful conclusion to the country's current bail-out.

This commentary showed up on the telegraph.co.uk Internet site at 4:25 p.m. BST yesterday afternoon---and it's the third contribution in a row from reader B.V.

Foreign ministers demand fighting end in east Ukraine

Foreign ministers from Germany, France, Russia and Ukraine called for an end to the renewed heavy fighting in eastern Ukraine following tough talks in Berlin on Monday.

German Foreign Minister Frank-Walter Steinmeier told reporters the talks had been “at times very controversial” but said all participants agreed there was no alternative to the ceasefire agreement signed in the Belarusian capital Minsk in February.

We need to ensure that the ceasefire is adhered to far more strongly as fully as possible,” Steinmeier said.

The talks took place amid a sharp spike in hostilities in eastern Ukraine over the weekend. On Monday one Ukrainian serviceman was killed and six were wounded in rebel-held territories.

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

Russia’s seat in G8 ‘hinges’ on resolution of Ukraine conflict – German FM

Despite intense diplomatic efforts on the part of Moscow to find a political solution to the Ukraine crisis, G7 leaders are not yet ready to welcome Russia back at the discussion table, German FM said, insisting on further steps to deescalate the crisis.

“I wish for Russia to return to the G8 nations but the way to get there hinges on its assistance and effort to put an end to the conflict in eastern Ukraine,” German Foreign Minister Frank-Walter Steinmeier said as the G7 (former G8) foreign ministers began to arrive in Lubeck.

Speaking at an event with German students, Steinmeier said Russia’s participation is vital for solving a variety of international problems. Making it clear that Germany does not wish Russia to be excluded indefinitely, the minister also warned against further isolating Russia.

“I have no interest in Russia being permanently isolated – we know from history that someone who is isolated can develop more dangerously than someone who is not,” he said.

This story put in an appearance on the Russia Today Internet site at 20 minutes after midnight Wednesday morning Moscow time, which was 5:20 p.m. EDT yesterday afternoon.

‘Useless and expensive’ - Russian MP presses for PACE exit

A senior lawmaker has suggested Russia quits the Parliamentary Assembly of the Council of Europe (PACE), and instead donate the multi-million annual fee paid to this organization to international groups that don’t show anti-Russian bias.

Today PACE is one of the most useless organizations and even people in Strasbourg where it is located are oblivious of its existence. I am sure that 98 percent of Europeans have never heard about it,” the head of the State Duma committee for education, Vyacheslav Nikonov, told popular Russian daily Izvestia.

It is just an assembly of lawmakers with inclinations towards rights protection who decide absolutely nothing, but who always start up their anti-Russian wailing. I cannot understand what we are still doing there,” the MP added.

This interesting article showed up on the Russia Today website at 10:37 a.m. Moscow time on their Tuesday morning---and I thank Roy Stephens once again for sending it our way.

China’s Crude Imports Slow to 4-Month Low as Storage Tanks Fill

China’s record pace of crude imports is easing as its refiners fill commercial stockpiles and new tanks for holding emergency supplies remain under construction.

Overseas crude purchases totaled 26.81 million metric tons in March, data released on the website of the General Administration of Customs in Beijing showed on Monday. That’s equivalent to 6.34 million barrels a day, down 5.2 percent from February and the slowest pace since November.

China accelerated its crude imports last year amid an almost 50 percent collapse in benchmark prices and its buying is now slowing just as the global market struggles to sustain a recovery. Refiners including PetroChina Co. have filled more than half of their commercial storage capacity, according to ICIS China, a Shanghai-based commodities researcher.

“China’s crude stockpiling needs have waned with record buying in December,” Jean Zou, an analyst at ICIS, said by phone from Guangzhou. “From April onwards, refinery maintenance will also curb the nation’s imports.”

This interesting Bloomberg article appeared on their website at just after midnight Monday morning Denver time---and it's another news item I found embedded in yesterday's edition of the King Report.

JPY Jumps After Abe Special Adviser Shows He Has No Shame Whatsoever

It appears being Special Adviser to Japanese Prime Minister Shinzo Abe comes with great pressure to toe the line - as opposed to advise. Koichi Hamada yesterday said USDJPY 105 was "appropriate" and USDJPY 120 was "too weak"... that sent USD/JPY tumbling.

These comments were reiterated in the early Asia session and adding that he "doesn't think JPY will weaken much further."

We wake up this morning and Reuters reports that he has entirely flip-flopped his views saying now that "120 is appropriate," and that he " would not oppose further easing." It's clear someone got a tap on the shoulder...

You couldn't make this stuff up.  This Zero Hedge news story was posted on their Internet site at 8:15 a.m. EDT on Tuesday morning---and I thank Dan Lazicki for finding it for us.

"The Business" does the Australian Housing Bubble

Australia Broadcasting Corporation's  "The Business" aired an interesting segment last night – the first of a 3-part series – looking at the Australian housing bubble, with a particular emphasis on Sydney.

The segment features Lindsay David, author of Australia Boom to Bust, along with SQM Research’s Louis Christopher and RMIT Emeritus Professor, Mike Berry.

Well, dear reader, from our own experiences here in North America, I'm sure we can let the good folks "down under" know how this housing bubble of theirs will eventually end, as we've seen it all before---and more than once.  The embedded 5:08 minute video clip appeared on the macrobusiness.com.au Internet site yesterday local time---and it's definitely worth watching if you have the interest.  I thank Australian reader Grahame Goodman for sending it our way.

Gold or Fiat? That is the question -- Torgny Persson

What happens when you deposit money at the bank?

Most people don’t think much about it. The bank probably safekeeps the money in their vault. Then I can come to the bank to withdraw my money any time. Right?

Wrong.

When you deposit money at the bank, you immediately relinquish your ownership to that money.

The bank will not only loan out “your” money, they will use it as as reserves to loan out even more than what you deposited in the first place. The justification for this is simply that you probably won’t claim “your” money back any time soon anyways. If you were to claim it back together with only a few percent of the other depositors, the bank would go bankrupt.

This commentary appeared on the Singapore Internet site bullionstar.com yesterday---and I thank Dan Lazicki for his final offering in today's column.

Hedge funds double bullish gold price bets

Large scale speculators in gold futures continue to add to bets on a rising price even as the metal struggles to hold onto the $1,200 an ounce level.

On Monday gold for delivery in June – the most active futures contract – drifted lower from Friday's closing price hitting a low of $1,196.35 during late morning trade in New York.

Gold has recovered 4% from its 2015 low of $1,148.20 an ounce hit mid-March but has not been able to break through $1,220 an ounce resistance, stymied by a strong dollar.

After eight straight weeks of increasingly bearish positioning on the gold market to levels last seen December 2013, large investors like hedge funds or so-called "managed money" have now doubled their bullish positions within the space of two weeks.

This sort of commentary, although well meaning, is typical of the drivel that passes for serious analysis on the major precious metal websites these days.  As the Managed Money covers short positions---and goes long, it's JPMorgan et al on the other side of the trade---and capping the price that's the real news here, but these so-called "analysts" just won't go there.  This "story" appeared on the mining.com website on Monday---and should be read for entertainment purposes only.  I found it on the Sharps Pixley website very late last night Denver time.

¤ The Funnies











¤ The Wrap

It’s usually hard to impossible to decipher and connect COMEX futures deliveries with resultant changes in COMEX warehouse inventories because there are too many unknowns. Because too much relevant information is unavailable, I’ve always refrained from such analysis. But this is a rare case where futures deliveries and warehouse movements do line up perfectly. In this case, important clues were revealed as a result of JPMorgan taking delivery in its own account (not for clients) and it owning its own warehouse, as well as the prompt timeline. Aside from being in conformity with my broader speculation that JPMorgan has acquired a massive quantity of physical silver, there are other reasonable conclusions to be made of JPMorgan shipping recently acquired silver to its own COMEX warehouse.

For one thing, it suggests JPMorgan is in position to hold its accumulated silver according to its own timetable. If it were looking to dump the metal quickly, why incur the one-time expense of moving it, as well as the loss of anonymity of ownership? It also tells us that JPMorgan, if anything, is increasing the tempo of its physical silver accumulation. And why not as the super depressed prices allow it to lower its average cost of ownership. Aside from that, there are other considerations.

Since it appears most, if not all of the metal shipped into the JPMorgan COMEX silver warehouse came from other COMEX silver warehouses, as opposed to being metal from outside the COMEX warehouse system, it doesn’t point to silver being in vast general oversupply. You may remember that it took until the last delivery day in the COMEX March delivery period for JPMorgan to get all of the 1500 contracts allowed. Since those delivering against open futures contracts are better off delivering quickly, rather than later, the time JPMorgan had to wait to get its maximum number of physical deliveries suggests an unwanted and perhaps forced delivery circumstance on the part of the issuers. - Silver analyst Ted Butler: 11 April 2015

I  get the distinct impression that all four precious metals got sold down in late Far East and early London trading on Tuesday precisely because the powers-that-be knew the retail sales numbers in advance---and wanted to make sure that gold et al had a very deep hole to dig themselves out of when the numbers did hit the tape.  Well, if that was the plan, it worked beautifully.

The reason that I suspected it once the entire trading day was laid out for all to see, is that I've seen "da boyz" do that before when ugly news was due the next day.  So along with the a dollar index in the toilet---and ugly retail sales numbers, JPMorgan et al were at the ready as sellers of last resort as the Managed Money covered short positions and went long on the news.

In the face of all that, they even managed to close three of the four precious metals down on the day---and took more slices off the salamis once again.  These guys are good.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday---and there's not a thing on these charts that would indicate a bad retail number or a face plant in the U.S. dollar index.

Mission accomplished!

And as I type this paragraph, the London open is about fifteen minutes away.  The precious metals didn't do much during Far East trading on their Wednesday, but all of them are up a hair from Tuesday's close in New York.  Gold volume is just over 14,000 contracts, with 99.5 percent of it in the current front month, so you know it's all of the HFT variety.   Silver's net volume is just over 2,700 contracts---and about 40 percent of the gross volume is roll-overs out of the May contracts.  It's unusual to see this level of roll-over activity at this time of day---and month.

The dollar index hit its current 99.056 high at precisely noon in Hong Kong trading on their Tuesday---and is now down to 98.84---but still up 7 basis points from Monday's close in New York.

Since yesterday at the 1:30 p.m. close of COMEX trading was the cut-off for Friday's Commitment of Traders Report, just eye-balling the gold and silver charts above, I'd guess that we'll see some sort of improvement in the Commercial net short position in both gold and silver, but it won't be overly large---and it certainly won't be anywhere near the mega-bullish configuration of three weeks ago.  We'll need much lower prices for that---and we'll probably get them as well.  Only the timing is unknown.

And as I hit the 'send' button on today's column at 5:20 a.m. EDT, I note that promptly at the London open, all four precious metals began to head lower---and all of the tiny gains I spoke of earlier have now vanished---and have been replaced by equally tiny loses.  Virtually all of the net 27,100 contract gold volume is of the HFT variety---and in the current front month.  Silver's net volume is now up to 5,200 contracts, with very decent roll-over volume.

The dollar index hit its 99.73 low tick about twenty minutes before the London open---and began to blast higher from there.  It's currently up 50 basis points, after being down 10 basis points at its low tick.  But as you can tell from the current precious metal charts that the sell-offs in all four began at the London open at 8:00 a.m. BST on the button, so the sell-offs were related to futures market trading on the Globex at the open---and not on what the dollar index was doing; a pattern that was similar to yesterday's action at this time of day.

But, having said all that, the precious metals are hanging in their pretty good at the moment considering the rally in the dollar index.

However, the Wednesday trading session is still young---and the die looks cast for another down day, as JPMorgan et al slice away.  I'd love to be proven spectacularly wrong of course, but if I was, it would be for the very first time.

So we wait some more.

See you tomorrow.

Ed Steer

]]>
Wed, 15 Apr 2015 04:16:00 +0000
<![CDATA[Central Bankers Gather Privately in Washington This Friday to Discuss Gold]]> http://www.caseyresearch.com/gsd/edition/central-bankers-gather-privately-in-washington-this-friday-to-discuss-gold/ http://www.caseyresearch.com/gsd/edition/central-bankers-gather-privately-in-washington-this-friday-to-discuss-gold/#When:04:26:00Z "It will be whatever da boyz are instructed to do"

¤ Yesterday In Gold & Silver

The gold price traded flat for a while once the markets opened on Sunday evening in New York, but got sold down in two separate selling bouts, with the low tick coming shortly after the London morning gold fix.  The 1 p.m. BST rally was dealt with in the usual manner an hour and change later in New York---and once the London p.m. fix was in, the gold price traded almost ruler flat for the remainder of the Monday session---and was closed below $1,200 spot.

The low and high ticks were reported by the CME Group as $1,196.10 and $1,209.30 in the June contract.

Gold closed yesterday in New York at $1,198.00 spot, down $9.30 from Friday's closed.  Net volume was pretty light at only 104,000 contracts.

The price action in silver followed virtually the same pattern, except the spike low tick came shorty before 1 p.m. BST---and after that it was the same old, same old.

The low and high were recorded as $16.225 and $16.51 in the May contract.

Silver closed on Monday afternoon in New York at $16.255 spot, down 23 cents from Friday.  Net volume was very much on the lighter side at 22,000 contracts.

Platinum received the same treatment, except there was no recovery at all until after 12 o'clock noon in New York---and then it was only by a few dollars. Platinum was closed at $1,150 spot, down 22 bucks on the day.

After blasting through its 50-day moving average to the upside, palladium met the same fate starting about 10:30 a.m. Zurich time---and "da boyz" on the COMEX finished the job starting shortly before 1 p.m. EDT.  Platinum was closed lower by 7 dollars at $768 spot.

The dollar index closed late on Friday afternoon in New York at 99.35---and proceeded to chop higher in fits and starts until its 99.99 a.m. London high tick, at least according to ino.com.  After that it fell all the way back down to 99.23 before "gentle hands" appeared and closed the index at 99.50---up 15 basis points on the day.

The gold stocks rallied to their high of the day in positive territory at, or minutes before, the London p.m. gold fix.  This was rather peculiar share action, as the gold price was being trashed at the time.  The the shares got sold off to around unchanged shortly after that---and stayed that way until minutes before 2:30 p.m. EDT---and then they gave up the ghost, as the HUI closed down 0.72 percent.

Once again the silver equities never got a sniff of positive territory, although their chart action was a carbon copy of the their golden brethren---and Nick Laird's Intraday Silver Sentiment Index closed down 1.37 percent.

The CME Daily Delivery Report showed that 1 gold and 5 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The link to yesterday's Issuers and Stoppers Report is here---and there's not much to see, although Jefferies was the short/issuer in both metals.

The CME Preliminary Report for the Monday trading session showed that gold open interest in April declined by another 72 contracts---and now stands at 2,398 contracts remaining.  Silver o.i. remained unchanged at 175 contracts.  The further we get into the delivery month with such smallish delivery action, the more intriguing it becomes.

There were no reported changes in GLD yesterday---and as of 7:13 p.m. EDT yesterday evening, there were no changes reported in SLV, either.  But when I checked back at 1:15 a.m. EDT this morning, I note that another 669,411 troy ounces were added.

The folks over at shortsqueeze.com updated their website on Friday with the changes in the short positions for both GLD and SLV up to and including March 31---and this is what they had to report.

In SLV, the short interest increased from 16.95 million shares/troy ounces, to 19.55 million troy ounces, or 15.32 percent.  In GLD the short interest increased from 1.29 million troy ounces, up to 1.46 million troy ounces, or 12.52 percent.

The U.S. Mint had a small sales report.  They sold 1,500 troy ounces of gold eagles---and 135,500 silver eagles.

There were 40,097 troy ounces of gold reported received at the COMEX-approved depositories on Friday---all of it went into HSBC USA's vault.  Only one kilobar was reported shipped out.  The link to that activity is here.

It was another monster day in silver, as 1,258,474 troy ounces were reported received, of which 1,200,224 troy ounces ended up in JPMorgan's vault.  On the other side---1,387,174 troy ounces were reported shipped out the door---and the link to that action is here.

There was no reported in/out movement at the 'Gold Kilo Stocks' depositories in Hong Kong on Friday.

I have a reasonable number of stories for a Tuesday column---and I hope it remains there for the remainder of Monday evening as I post them.

¤ Critical Reads

The $9 Trillion Short That May Send the Dollar Even Higher

Investors speculating the dollar rally is fizzling out may be overlooking trillions of reasons why it will keep on going.

There’s pent-up demand for the U.S. currency that will underpin years of appreciation because the world is “structurally short” the dollar, according to investor and former International Monetary Fund economist Stephen Jen.

Sovereign and corporate borrowers outside America owe a record $9 trillion in the U.S. currency, much of which will need repaying in coming years, data from the Bank for International Settlements show.

In addition, central banks that had reduced their holdings of the greenback are starting to reverse course, creating more demand. The dollar’s share of global foreign reserves shrank to a record 60 percent in 2011 from 73 percent a decade earlier, though it’s since climbed back to 63 percent.

This isn't really new "news," but the folks over at Bloomberg have finally seen fit to post a story about it.  It appeared on their Internet site at 5:00 p.m. Denver time on Monday afternoon---and it's courtesy of West Virginia reader Elliot Simon.

Dollar’s Rise Reshuffles Global Economy Into Winners and Losers

The rising U.S. dollar is redistributing growth throughout the global economy.

The greenback’s ascent to the highest in a dozen years on a trade-weighted basis is eroding the competitiveness of the U.S. and countries whose exchange rates track the dollar, including China. It’s also pushing down commodity prices, hurting producers such as Brazil, and threatening other emerging markets where companies borrowed in the U.S. currency when it was cheaper.

On the flip side, the euro area and Japan are cashing in as their companies gain the edge in world markets that economies need to boost growth. The likes of India are benefiting, too, by paying less for their energy imports.

“The dollar’s rise is sorting the world into winners and losers,” said Peter Hooper, chief economist at Deutsche Bank Securities Inc. in New York and a former Federal Reserve official.

This story is a corollary to the first one, as it looks at the dollar's rise from another perspective.  It appeared on the Bloomberg website one minute after the previous story---and it's also courtesy of Elliot Simon.  It's worth skimming.

Einhorn Slams Bernanke's Blog, Says Fed Policy is a "Destructive Force That Shouldn't Exist Outside of Fiction"

It's getting serious for the academic hacks who meet every two months in Basel to drink $5000 bottles of wine and regale each other with their stupidity, most of whom have never held a job outside of academia, and for whom the only solution to the second great global depression is simply to buy assets and specifically stocks in a bid to restore confidence, oblivious that everyone now understands that the greater the central bank intervention, the greater the confidence destruction.

So serious, in fact, that the Fed is now on the defensive not only from tinfoil bloggers who said QE would ultimately lead to war, revolution, and global catastrophe, but very serious people who say QE will "Permanently Impair Living Standards For Generations To Come".

In fact, the only people who defend the Fed now are socialists who believe in Magic Money Trees, other career academics, E-trade babies who believe that BTFD and BTFATH is what investing is about, and of course, various sycophants and drama majors posing as financial journalists.

Meanwhile, in an attempt to cover up his criminal actions and exonerate his genocidal stupidity which will result in global conflict, revolution and/or war, the man responsible for the final Fed Bubble, Ben Bernanke, has taken on blogging.

Luckily there are many who have taken him to task, including the man who first compared Fed policy to eating jelly donuts, David Einhorn, and who during last week's Grant's Investment Conference, had this to say about the most disturbing thing written recently by Bernanke---

This worthwhile read, including Einhorn's speech, showed up on the Zero Hedge website at 2:58 p.m. yesterday afternoon EDT---and it's the first offering of the day from Dan Lazicki.

U.S. Telecom Association Files Suit Against Government's New Internet Rules

A legal fight against the Federal Communications Commission's new Internet traffic rules has begun with a suit by the United States Telecom Association, an industry group that represents companies including AT&T and Verizon.

The FCC's rules were approved in February and uphold the principle of net neutrality — that online content be allowed to load at the same speed. They forbid paid fast lanes favoring some content and say broadband providers can't slow Web traffic or block content.

The rules were published Monday in the government's Federal Register and would go into effect on June 12 if a court doesn't block them. Litigation could drag on for years.

USTelecom said Monday that it has filed suit to throw out the rules in the U.S. Court of Appeals for the District of Columbia. The suit asks for a review of the FCC's rules on the grounds that they violate federal law and are arbitrary. The suit also says the FCC didn't follow the proper procedure for creating the rules.

An FCC spokeswoman said in an emailed statement Monday that the agency is confident the new Internet rules will be upheld by the courts.

This AP story from 3:22 p.m. EDT yesterday afternoon, filed from New York, was picked up by the abcnews.go.com Internet site---and it's another contribution from Elliot Simon.

What's Really Behind the U.S Crude Oil Build

Last week we saw another 10MB massive crude oil build domestically at a time when US production is flattening, refinery capacity is rising and gasoline demand is growing (5% year over year vs. 3% or lower in the recent past). This divergence can be explained in part from the rising import of heavier oil which accounted for 6.1MB (869,000 B/D) of the 10MB build last week. Imports for the week rose a whopping 6.5% sequentially and 8.5% vs. the 4 week moving average!  Once again the chase to create sensationalistic headlines to drive down oil is self-evident as US production rose a meager 14,000B/D and was not the main cause of the rise. So why, month after month since 2014, have imports risen when there exists a “glut” in US oil inventories?

In 2014 according to the EIA, API Gravity (the weight of oil) steadily increased and rose 2.84% which is very significant in adding to the oversupply of US oil. In January 2015 that number rose to nearly 3.1% year over year, according to the latest data point we have from the EIA. Given the recent surge in imports last week the bet it has risen even more.

This interesting article first appeared on the OilPrice.com Internet site last Friday---and is now posted in the clear at the Zero Hedge website yesterday afternoon at 2:33 p.m. EDT.  I thank Dan Lazicki for sending it.

330 Million Citizens and Only One Democrat Interested in being President

I was watching Meet the Press Sunday and found it fairly comical when they got around to discussing Hillary Clinton.  In fact, they replayed a SNL skit from Saturday night that made fun of Hillary and the fact that she is the only viable candidate for the Democrats because of the Clinton dynasty.  The host of Meet the Press, Chuck Todd and his panel guests all had a good laugh “ha ha ha… yes that’s funny because it’s true ha ha ha”.  And once they had a good if not awkward chuckle, one can only presume at the expense of the American people, they simply moved on and stepped over that giant elephant in the room.  So despite the fact that we all understand something is incredibly wrong with the fact that Hillary has no challengers in a nation of 330 million citizens we are simply supposed to ignore this giant puss filled boil on the face of our democratic process.

How can this be?  How is it that in such a well educated society with an abundance of opinions throughout this vast land the Democratic party is unable to find anyone outside of the core political machine willing to even take a stab at becoming the chief public servant?  This is supposed to be a self governed democracy.  We have destroyed the entire Middle East over the past 15 years in the name of self governance and rule by the people for the people.  What a farce!  How can anyone in this country say with a straight face that we are a nation ruled by the people for the people when the system is so locked down to anyone outside of the elite political insiders that we cannot even find a few tokens to throw at the facade of democracy at work?

This right-on-the-money commentary appeared on the firstrebuttal.com Internet site yesterday sometime---and it's another offering from Dan Lazicki.

Britain crippled by £222bn debt from backroom PFI deals – report

Each U.K. citizen has amassed a debt of £3,400 ($4,976) without even knowing about it. This is due to a U.K. government scheme that signed controversial deals with private companies to borrow money on behalf of the public and pledging to pay it back later.

The deals, which are known as Private Finance Initiatives (PFIs), were used by London to pay for public infrastructure, such as schools and hospitals. Signed with private enterprises, they would allow the government to “buy now, pay later,” the Independent on Sunday reports.

A problem is emerging though. Despite not having paid a penny, every U.K. national is now in debt to the tune of £3,400 ($4,976) because the cost of paying back the PFIs is growing every year. 2014 saw an increase of £5bn ($7.3bn) and this figure could rise even higher with inflation.

The system has proved to be fantastic for private companies, who are managing to reap large profits from investing in public infrastructure. However, financial experts have labelled the government’s policy a “financial disaster,” due to the high amounts of interest accumulated.

This interesting news item was posted on the Russia Today website at 3:37 a.m. Moscow time on their Monday morning, which was shortly after midnight in London---and 7:37 p.m. on Sunday evening in Washington.  I thank South African reader B.V. for finding it for us.

End of the 'special relationship'? Secret U.S. memo reportedly says U.K. losing influence with Washington

A secret memo prepared by a Congressional think tank and seen by the Daily Mail says that the US may need a "reassessment of the special relationship" with its key economic partner, Britain, "because its geopolitical setting has been changing."

Winston Churchill's 1946 speech to Westminster College, in Fulton, coined the phrase "special relationship" to describe the exceptionally friendly political, diplomatic, economic, military and cultural relations between the United Kingdom and the United States.

Some 69 years later, when PM David Cameron last visited the White House in January, he quoted President Barack Obama as saying that “the special relationship is stronger than it has ever been privately and in public and I agree.”

However, a classified document dated April 2015 and prepared for the for members of US Congress reportedly states that "the UK may not be viewed as centrally relevant to the United States in all of the issues and relations considered a priority on the US agenda."

This very interesting news item put in an appearance on the Russia Today website at 9:40 a.m. Moscow time on Sunday morning---and it's the second contribution of the day from Roy Stephens.

Taste of its own medicine? Austerity overshadows Finland vote

When Finland's opposition leader and likely new prime minister Juha Sipila warned Finland could be the next Greece, it was an election campaign quip with a serious side - signalling the risks for a country facing a perfect storm of economic woes.

Two hours drive Sipila's office in bustling Helsinki, the town of Kotka shows signs of what he means. Around one in five people is unemployed, a rate not far off Greece. Hit by the closure of paper mills left behind by the digital age, it is light years from Finland's tech-savvy image.

"When a pulp factory closes, that can be 400 people," said Sirpa Paatero, a government minister handing out campaign leaflets in the windswept town square. "The new companies coming up employ one, or two or three. That's just not enough."

Finland heads to an April 19 parliamentary election facing its worst crisis in decades - three years of recession in an economy shackled by the shrinking of its flagship Nokia, rising labour costs and a diminishing working population. Economic crisis in Russia, a big export market, has struck another blow.

This interesting Reuters article from Sunday, filed from Kotka, Finland, showed up on the South African Internet site sharenet.co.za yesterday---and it's the second offering of the day from reader B.V.

"We Have Come to the End of the Road" - Greece Prepares For Default, Financial Times Reports

Update: as always is the case in Europe, nothing is confirmed until it is officially denied by officials, so here you go: GREEK GOV'T OFFICIAL DENIES FT REPORT GREECE PLANNING DEFAULT

There was no explanation from the government official where Greece would get the €2.5 billion it needs to fund upcoming IMF interest and principal payments.

* * * * *

It should hardly come as a surprise that after the latest round of Greek pre-negotiation negotiations with the Troika, in which the Greek representative was said to behave like a taxi driver, who "just asked where the money was and insisted his country would soon be bankrupt" and in which the Eurozone members "were disappointed and shocked at Athens' lack of movement in its plans, and in particular its reluctance to talk about cutting civil servants' pensions" that the next Greek step is to fall back - yet again - to square zero: threats of an imminent default. Which is precisely what, according to the FT, has happened "Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking."

A word of advice: now that the Eurozone, foolishly, thinks it is insulated from the consequences of a Grexit due to the ECB's QE, it does not take to ultimatums or blackmail very well. In fact, it takes these very badly.

In any event, here again is the same old song, sung one more time, now by the FT:

This "news" item was posted on the Zero Hedge website at 2:09 p.m. EDT yesterday afternoon---and I'd read it for entertainment purposes only at the moment.  I thank Dan L. for sharing it with us.

Putin lifts ban on delivery of S-300 missile systems to Iran

The Russian president has repealed the ban prohibiting the delivery of S-300 missile air defense systems to Iran, according to the Kremlin's press service. The ban was introduced by former President Dmitry Medvedev in 2010.

“[The presidential] decree lifts the ban on transit through Russian territory, including airlift, and the export from the Russian Federation to the Islamic Republic of Iran, and also the transfer to the Islamic Republic of Iran outside the territory of the Russian Federation, both by sea and by air, of air defense missile systems S-300,” says the information note accompanying the document, RIA Novosti reported.

The decree enters into force upon the president’s signature.

Russian Foreign Minister Sergey Lavrov commented on the decision, saying that Moscow’s voluntary embargo on S-300 deliveries was no longer necessary, due to the progress in Iran’s nuclear talks made in Lausanne on April 2.

This article appeared on the Russia Today website at 12:27 p.m. Moscow time on their Monday afternoon---and I thank Roy Stephens for digging up this item for us.  A story about was also posted on the france24.com Internet site.  It's headline "Russia lifts ban on missile deliveries to Iran"---and I thank reader B.V. for bringing it to our attention.

Saudi Arabia’s Plan to Extend the Age of Oil

Last fall, as oil prices crashed, Ali al-Naimi, Saudi Arabia’s petroleum minister and the world’s de facto energy czar, went mum. He still popped up, as is his habit, at industry conferences on three continents. Yet from mid-September to the middle of November, while benchmark crude prices plunged 21 percent to a four-year low, Naimi didn’t utter a word in public.

For 20 years, Bloomberg Markets reports in its May 2015 issue, the world’s $2 trillion oil market has parsed Naimi’s every syllable for signs of where supply and prices are heading. Twice during previous routs—amid the Asian financial crisis in 1998 and again when the global economy melted down 10 years later—Naimi reversed oil’s free fall by orchestrating production cutbacks among members of OPEC. This time, he went to ground.

At the cartel’s semiannual meeting on Nov. 27 in Vienna, Naimi shot down proposed output reductions supported by a majority of the 12 members in favor of a more daring strategy: keep pumping and wait for lower prices to force high-cost suppliers out of the market. Oil prices fell a further 10 percent by the end of the next day and kept going. Having averaged $110 a barrel from 2011 through the middle of 2014, Brent crude, the global benchmark, dipped below $50 in January.

“What they did was historic,” Daniel Yergin, the pre-eminent historian of the oil industry, told Bloomberg in February. “They said: ‘We resign. We quit. We’re no longer going to be the manager of the market. Let the market manage the market.’ That’s when you got this sort of shocked reaction that took prices down to those levels we saw.”

This longish Bloomberg essay showed up on their website at 4:00 p.m. MDT on Sunday afternoon---and it's definitely worth reading if you have the interest.  The first reader through the door with it was Howard Wiener.

Jefferies exits commodities brokerage with Bache book sale

Jefferies Group LLC said it will sell most of its Bache unit's commodities and financial derivatives accounts to Societe Generale, ending the investment bank's four-year foray into the competitive brokerage business.

The deal to transfer accounts, ends a months-long effort by Jefferies, owned by Leucadia National Corp, to divest the unit as it struggles with high costs and falling fees.

For Jefferies, the sale and winding down of the business marks an exit after its first push into commodities in 2011 with its $430 million purchase of Prudential Bache.

Tighter regulation and increased competition have slashed margins for brokers, but Jefferies was also hit by the bankruptcy of its client, OW Bunker, last year.

Jefferies was always a huge short/issuer in silver out of its client account---and during the last four and half months issued 2,232 silver contracts.  One is left to wonder if it will be Societe Generale that will fill their shoes once they've departed the scene at the end of June.  However, if you read the first paragraph carefully, you'll notice the word "most" in there---and one wonders if it includes their precious metal trading desk. This Reuters article appeared on their website at last Thursday.

Many gold miners in dire straits despite costs cuts -- Lawrence Williams

The latest detailed report on gold from GFMS in London does not make pretty reading for those either running gold mining operations, or investing in them. According to the specialist precious metals consultancy around 50% of the gold mining sector looks to be loss-making on its own calculated All-in-Costs basis at a $1,200/ounce gold price.

The GFMS All-in-Costs parameter, which is even more all-encompassing than the All In Sustaining Costs (AISC) metric, which has become the industry norm for most gold mining company reporting, is intended to represent the ‘stay-in-business’ capital cost, or the expenditure necessary to maintain production at current rates. In addition to the components included in the Total Production Cost, the All-in Cost figure also incorporates corporate administration costs (head office overheads), interest charges, exploration expense, extraordinary charges (such as retrenchment costs and asset carrying value write-downs), plus sustaining/on-going capital expenditure. As such, GFMS reckons that its own All-in Cost calculations may be viewed as a far more accurate measure of ‘real’ industry margins even than AISC. Both measures though do go some way to explaining why companies which boast of their mines having exceptionally low cash costs can still end up making significant corporate losses.

Thus the consultancy estimates that in 2014 the average All-in Cost of gold mine production was $1,314/oz, which represented a $427/oz, or 25%, reduction over the figure for 2013.

This commentary by Lawrie showed up on the mineweb.com Internet site last Friday---and I missed it for my Saturday column.

'Civil war' brewing over disputed Greek goldmine

Scrawled on the homes of the village of Megali Panagia in northern Greece are slogans emblematic of the deep rift caused in this society by a controversial Canadian gold mining project.

"Goldmines are a curse for every nation," reads one -- others are more profane.

For the past three years, the investment of Hellenic Gold -- a subsidiary of Canadian firm Eldorado Gold -- has deeply divided the local communities of the Halkidiki peninsula, even setting family members at each others' throats.

In Megali Panagia itself, tit-for-tat attacks on shops and cars belonging to rival factions have been going on for years.

This article, filed from Thessaloniki, Greece, put in an appearance on the france24.com Internet site at 9:06 a.m. Europe time on their Sunday morning---and it's the fourth and final offering of the day from South African reader B.V., for which I thank him on your behalf.

Iran, Secret Gold and the Mystery Trade Boosting Turkish Exports

Turkey’s trade balance, one of the few points for solace in this year’s worst performing bond market, might not be improving as much as the data appears to show.

Despite having no significant gold deposits, exports of the precious metal made up 70 percent of the narrowing in the current account gap, according to government data published Friday. A gold importer for 28 of last 30 years, Turkey became an exporter in 2012 when it started paying for Iranian gas in precious metals as a way of circumventing international sanctions that may soon be lifted.

In the face of slowing economic growth and accelerating inflation, Turkish President Recep Tayyip Erdogan pointed to the shrinking current account deficit among economic achievements ahead of parliamentary elections in June. Government 10-year bonds in liras, whose yields increased the most among 24 emerging-market nations tracked by Bloomberg in 2015, have steadied in the past three weeks.

“What is worrying is that the reduction in the shortfall stems from gold exports,” Nicholas Spiro, managing director of London-based Spiro Sovereign Strategy, said by phone on Friday. “It’s a very murky, very mysterious, very opaque situation. Iran is clearly the obvious suspect.”

This very intriguing gold-related news item appeared on the bloomberg.com Internet site at 3 p.m. Denver time on Sunday afternoon---and it's the second offering of the day from reader Howard Wiener.

Kyrgyzstan’s Premier Says No Gold Deal as Mining Industry Fizzles

Kyrgyzstan’s prime minister has ordered a halt to the country’s two-year effort to renegotiate operating terms at its flagship gold mine, reasoning that a joint venture is no longer in the country’s best interests. Despite lawmakers’ near-constant chest thumping and promises to nationalize the Kumtor mine, the announcement seemed to catch them off guard.

Foreign investment has plummeted as Kyrgyzstan and Toronto-based Centerra Gold have struggled to restructure ownership of Kumtor, which is responsible for generating up to 12 percent of Kyrgyzstan’s GDP and about 40 percent of export earnings. Under the current operating contract, signed in 2009, Centerra wholly owns the mine; Kyrgyzstan, in turn, owns one-third of Centerra. Parliament voted in February 2013 to scrap that agreement, arguing it was signed by a corrupt former leader and is not in Kyrgyzstan’s best interests.

But the government has struggled to come to terms that please the raucous legislature, while maintaining that nationalization would be a disaster. In December 2013, the government and Centerra announced the outline of a deal that would equally split ownership of the mine and see Kyrgyzstan cede its Centerra shares, and thus its interest in smaller projects in Mongolia, Turkey and Canada,

What a nightmare for this company.  This article was posted on the New York-based Internet site eurasianet.org at 2:14 p.m. EDT yesterday---and I thank International Man senior editor Nick Giambruno for passing it around yesterday. 

What is China’s real gold consumption and where is it headed? -- Lawrence Williams

There is considerable dissension in the analytical sector over what actually constitutes China’s real gold demand. On the one hand we have what the mainstream analysts record as Chinese consumption, which comes in at somewhere between 800 and 900 tonnes last year. On the other hand we have withdrawals from the Shanghai Gold Exchange (SGE) which totalled just over 2,100 tonnes in 2014, which some, notably China gold watcher Koos Jansen and Australian chart king, Nick Laird, feel is the real figure. There is thus an enormous discrepancy in the perceived data, which is, in part due to differing interpretations of what consumption is (GFMS and Metals Focus both use a somewhat limited view of what goes into the ‘consumption’ calculation, while CPM Group insists there is a substantial degree of double, or even triple or more, counting of recycled gold in the SGE figure, but without really quantifying how much is actually involved.)

As an indicator of gold flows into China, all the data has value in indicating trends, but what the various interpretations seem to show is that Chinese wholesale demand (i.e. demand by the general public comprising primarily jewellery and investment (bars and coins) and other gold investment products did indeed slip sharply in 2014 over 2013’s record levels- perhaps by as much as 30%. But the SGE figures also suggest that overall Chinese demand (which includes gold going into Chinese bank vaults for use in financial transactions – which falls outside the mainstream analysts’ ‘consumption’ calculations) did not fall back by nearly as much – perhaps by only 4%. This could be seen as indicating the banking sector perhaps accounted for close to 1,000 tonnes in 2014 – which seems an awful lot and still leaves a serious statistical discrepancy.

What is apparent from the latest set of mainstream analysts’ ‘consumption’ statistics – even though they are hugely below the SGE overall figures – is that China remained the world’s No. 1 gold consumer last year, comfortably ahead of India. Unfortunately the World Gold Council’s earlier figures, suggesting China had fallen behind India, will continue to be quoted by mainstream media as definitive – unless, and until, perhaps the WGC adjusts its data in the light of the latest GFMS figures, when the next Gold Demand Trends report comes out next month. Of coursed if one adds in the presumed bank demand, China will have remained hugely ahead of India.

This commentary by Lawrie appeared on the mineweb.com Internet site at 2:43 p.m. BST yesterday afternoon---and it's definitely worth reading.

Shanghai International Gold Exchange Comes to Life

In September 2014 the Shanghai Gold Exchange (SGE) launched its International Board, the Shanghai International Gold Exchange (SGEI). After a slow start, the volume of the physical SGEI kilobar contract (iAu99.99) has transcended all other SGE contracts in week 15 (April 6 - 10).

The primary goals for the launch of the SGEI was to facilitate gold trading in renminbi, improve price discovery in renminbi and internationalize the renminbi. The Chinese consider gold as an indispensable component of China’s financial market and for the renminbi to internationalize the renminbi-gold market has to internationalize. It could be that the spike in trading volume of iA99.99 was an incidental burp, it could also be we’re witnessing the Chinese international gold exchange entering its adolescence.

In any case, the chairman of the SGE, Xu Luode, has been very clear about his intentions with the SGEI. A few snippets from Xu…December 2013...The Shanghai Gold Exchange chairman Xu Luode said he considers the construction of an offshore gold exchange international gold market in the Shanghai Free Trade Zone, for the cross-border use of renminbi, it will be launched for the international offshore investors… The industry comments that it will be a tool to promote the internationalization of the renminbi, … the goal is to build Shanghai into an international gold exchange trading market with global influence.

This longish article by Koos Jansen put in an appearance on the bullionstar.com Internet site early Monday morning Singapore time---and I thank Koos for bringing it to our attention.  It's worth reading---and based on what he speaks of in this article, I'll be very interested in what the SGE withdrawals show when they're reported this Friday.

The IMF’s Gold Depositories – Part 3, Gold Swaps and the Quality of the IMF Gold

The IMF sold 403 tonnes of gold over 2009-2010. Of this total, 222 tons of the sales were in the form of direct sales to India, Bangladesh, Sri Lanka and Mauritius  (i.e. 200 tonnes to India in October 2009, 10 tonnes to Sri Lanka, 2 tonnes to Mauritius, and 10 tonnes to Bangladesh) and the remainder of approximately 181 tonnes was sold on the open market supposedly.

During and after the IMF’s ‘403 tonnes’ gold sale, the IMF never commented on which depository (or depositories) this gold was sold from. The Reserve Bank of India said sometime after the 2009 purchase from the IMF that all of its gold was held either within India,  at the Bank of England, or with the Bank of International Settlements. However, it’s possible that some of the IMF’s gold sales to India, Bangladesh, Sri Lanka and Mauritius in 2009-2010 were undertaken by transferring gold from the IMF’s Nagpur holding to gold accounts of the Reserve Bank of India, the Central Bank of Sri Lanka, the Bank of Mauritius and the Bangladesh Bank held at Nagpur. It would make some sense to do this, since the three other countries are regionally proximate to India and enjoy good international relations with India, however some of the IMF gold in Nagpur was of variable quality (read non-good delivery), and furthermore the RBI In Nagpur is not a ‘major gold trading center’ so beloved of gold hoarding central bankers.

Selling from Nagpur would have zeroed out and allowed the closure of the IMF’s gold holdings at Nagpur, and left IMF gold in only three countries, namely the US, UK and France. Since the IMF has become far less inclined to share information on its gold holdings and its gold depositories since the heady days of the 1960s and 1970s, the exact structure, quality and distribution of the IMF’s gold holdings is information that only former and current IMF Managing Directors such as Michel Camdessus, Dominique Strauss-Kahn and Christine Lagarde may be privy to.

This intriguing gold-related story [Part 3 of 3] by Ronan Manly appeared on the bullionstar.com Internet site on Saturday Singapore time---and for obvious reasons had to wait for today's column.  It's definitely worth reading.

Central bankers gather privately in Washington this Friday to discuss gold

Attention, mainstream financial journalists! Here's something else important for you to ignore this week, thanks to the diligent eye of gold researcher and GATA consultant Ronan Manly.

It's a breakfast meeting to be held Friday in Washington for "a select group of central banks and other official-sector institutions," sponsored by the Official Monetary and Financial Institutions Forum and the World Gold Council, to discuss "gold, the renminbi, and the multi-currency system," convened in conjunction with the spring meeting of the International Monetary Fund and World Bank Group, a United Nations agency.

"Discussions," the discreet announcement from OMFIF says, "are under Chatham House Rules," whereby information may be used but never attributed.

While many nations with central banks purport to be representative democracies and while the World Gold Council purports to be the representative of the gold industry, some of whose participants actually have to get their hands dirty every day, attendance at Friday's meeting will be by invitation only. So for the record GATA has requested one.

This absolute must read GATA release showed up on their Internet site yesterday at 3 p.m. EDT.

¤ The Funnies

¤ The Wrap

Included in the continuing flow of evidence that silver is more intensely manipulated in price than gold is the physical movement of metal into and out from the COMEX-approved silver warehouses. No other metal, gold or otherwise, gets moved like physical silver has gotten moved in the COMEX warehouses these past four years. Certainly I have featured it every week since April 2011. Recently, I have openly speculated that the physical silver turnover might be cooling off based upon declining weekly turnover totals. Last week, for example, the turnover dwindled to only 1.2 million oz, the lowest movement I can remember.

Turnover may be cooling overall, but not this week. Actual silver movement in and out from the COMEX warehouses jumped from the lowest to maybe the highest ever, as an incredible 11.1 million oz were moved this week. Just as remarkable as the high turnover total was, it was remarkable that total inventories fell by a minor 1.4 million oz to 175.1 million oz.  This preserves the key observation that over the past year and a quarter, while in/out movement was white hot, COMEX silver inventory totals hardly budged. I concluded that this was a sign of supply tightness. I still feel that way, but the physical COMEX silver movement means something more specific this week. If you are guessing it might have something to do with JPMorgan, you wouldn’t be wrong.

Over the last three days, 3.4 million oz were shipped into the COMEX silver warehouse owned by JPMorgan. Since the silver physically deposited into the JPM warehouse came from other COMEX silver warehouses, the turnover unique to JPMorgan was more than 60% of the total 11.1 million oz turnover (3.4 million oz x 2 for in and out). The deposit into the JPMorgan warehouse further cemented it as the largest COMEX silver warehouse with more than 52 million oz in total reported holdings. Please remember that this was not an operating COMEX warehouse prior to April 2011---and all its deposits have occurred in the past four years. Not coincidentally, this is the same time over which I have claimed that JPMorgan had turned big physical silver buyer. - Silver analyst Ted Butler: 11 April 2015

With all four precious metals knocking on the doors of their respective 50-day moving averages at Friday's close, it should have come as no shock to anyone that JPMorgan et al weren't going to allow them to rise any further---and that's what happened.  But they allowed palladium to breach its on Monday morning in Zurich before they acted against that metal.  I'm sure that they wanted to reassure the dumb-as-posts T.A. types that their charts---and therefore their analysis---were still "accurate".

The proof is in the 6-month charts posted below.

With these "failures" at their respective 50-day moving averages, it's anyone guess as to where we go from here, but down would be my bet.  However, even a move back above the 50-day moving averages is not out of the question---and whatever direction the move may be, it won't have a thing to do with supply and demand.  It will be whatever "da boyz" are instructed to do.

As you can tell from the last story that's posted in today's column, it should be obvious by now to all and sundry, that the WGC is not in the business to help the miners.

What are they doing in secret that they can't tell their members, the public, or the gold community at large?

They were, as Chris Powell so eloquently stated over a decade ago, formed for the sole purpose of ensuring that a real world gold council could never get started---and that the interests of the mining fraternity that are members, were never seriously addressed.  This has come to pass---and exactly the same can be said for The Silver Institute.  Anyone who believes otherwise is delusional.

And as I write this paragraph, the London open is about ten minutes away.  The gold price managed to struggle back to the $1,200 spot price mark in early Tuesday morning trading in Hong Kong.  But then some thoughtful soul showed up at noon local time---and shaved ten bucks off the price over a period of two hours and change.  Silver and platinum prices, which were both up on the day as well, were dealt with in a similar manner---and at the same time.  Palladium got hit two hours later.

Net gold volume is getting up there---and sits at 23,000 contracts.  Virtually all of it is in the current front month, so it's obviously of the HFT variety.  Silver's net volume is around 3,900 contracts---and a tiny chunk of that is roll-over related.  The dollar index has been rallying since it hit its 99.30 low just before 9 a.m. Hong Kong time.  It's up 33 basis points off that low, but up only 12 basis points from Monday's close in New York.

Since today is Tuesday, it's also the cut-off for this week's Commitment of Traders Report.  The numbers in last week's report seemed to be OK---and there were no glaring deficiencies that I could tell.  But I'll be ever watchful, as I've always been, for signs that price/volume data is not being reported in a timely manner.

Here's another paragraph I stole from Ted's weekly review to paying subscribers on Saturday---and it's all about the big deterioration in gold during the reporting week.  I wrote about in my Saturday column, but his comments are much better: "Like I did in last week’s review with silver, it is proper to view the last two reporting weeks in gold on a combined basis. Over the two reporting weeks, the Commercials sold more than 55,000 COMEX gold contracts, the equivalent of 5.5 million oz. No other gold venue featured this quantity of change of ownership. The principal buyers were the technical funds in the Managed Money category, accounting for roughly 45,000 net contracts of gold bought over two weeks. There is no question that these two groups of traders on the COMEX - Commercials and Managed Money - dictate and set prices, as the COT data continuously indicate. The only question is if this is legal since it has nothing to do with any gold market fundamentals---and as such, would seem to be in violation of commodity and interstate laws of commerce." - Silver analyst Ted Butler:  11 April 2015

Since when did laws of any type matter to JPMorgan et al?

And as I send today's effort off to Stowe, Vermont at 5:25 a.m. EDT, I see that all four precious metals are trading well below their Monday closing prices---and at new low ticks on the day.  Palladium is down 2 percent, although platinum is only down 2 bucks at the moment. Net gold volume is just over the 39,000 contract mark, with 99 percent of it is in the current front month, so it's still all of the HFT variety.  In silver, net volume is up to 6,900 contracts, with 15 percent of the gross volume being roll-overs out of the May contract.  The dollar index has been chopping and flopping---and is currently up 3 basis points.

It's too soon to tell whether this is the beginning of new round of engineered price declines or not, but the current price action hints at that possibility.  I'm sure that the situation will have more clarity by the close of trading today---and if not today, then certainly by the COMEX close on Wednesday.  One of their tricks is to wait until the day after the cut-off for the current COT Report before they really pull the pin on the Managed Money---and it will be interesting to see if that turns out to be the case here.

After going into the hole to the tune of about 20,000 contracts in silver---and 55,000 contracts in gold over the last three weeks, "da boyz" will be looking to get themselves right again, by putting the Managed Money traders fully back on the short side from whence they just came.  That means much lower prices going forward, as JPMorgan et al get back to the salami slicing to the downside once again.

But before heading off to bed, I'd like to point out that Casey Research's own Louis James has been watching a company that he is convinced will be the world's next high-grade gold producer.

It’s an extremely well-funded operation working a high-grade gold deposit 8x richer than the average mine---and that’s scheduled to throw the switch on a brand-new mine and start producing gold for the very first time.

Up to this point, the market is largely ignoring it, so shares of this company are currently trading well below book.  This is your chance to invest in an advanced-stage producer at a dramatic discount... just before its true value is realized. But you must act before April 30.

If you want to find out more, you can do so by clicking here.

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

Ed Steer

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