<![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[John Hathaway: Monetary Tectonics]]> http://www.caseyresearch.com/gsd/edition/john-hathaway-monetary-tectonics/ http://www.caseyresearch.com/gsd/edition/john-hathaway-monetary-tectonics/#When:10:11:00Z "Nothing much should be read into yesterday's price action"

¤ Yesterday In Gold & Silver

NOTE:  Even though it's Thanksgiving Day in the USA tomorrow, I will have a column.  But it will be posted on the Saturday time schedule.

The gold price peaked out on Tuesday at the London a.m. gold fix and then got sold down back below the $1,200 spot price by 1:10 p.m. GMT---10 minutes before the Comex open.  The ensuing rally back above $1,200 got hit by the HFT boyz a minute or so before 8:30 a.m. EST---and 30 minutes later, gold hit its low tick of the day.  After that it rallied back to the $1,200 pot mark at or just before the London p.m. gold fix, which was minutes before 10 a.m. in New York.  The price dipped a few dollars after that, but rallied to close a hair above the $1,200 mark.

The low and high ticks, such as they were, were reported by the CME Group as $1,189.00 and $1,202.20 in the December contract.

Gold closed the Tuesday session at $1,201.20 spot, up $2.90 from Monday's close.  Gross volume came close to 360,000 contracts, but only netted out to 62,000 contracts, even lower than Monday's net volume.

The silver price didn't do much, hitting its low of the day shortly before 1 p.m. Hong Kong time.  From there it rallied to its high tick around 8:25 a.m. GMT in London.  From the high of the day, the silver price got sold down to its low of the day at 9:01 a.m. EST---the same minute as gold hit its low.  From that point silver rallied until 10:30 a.m. EST---and then sagged down until 12:30 p.m. EST [the same as gold]---and from there it rallied until around 3:30 p.m., before trading sideways into the close.

The low and high ticks were recorded as $16.435 and $16.69 in the December contract.

Silver's gross volume was a bit more than 125,000 contracts, but netted out to only 16,500 contracts, which is a very tiny amount.

Platinum rallied early in Far East trading on their Tuesday but rolled over, hitting its low of the day around 1 p.m. Hong Kong time.  From there, it rallied until about noon in Zurich.  It had a down/up dip from 8:30 to 9:00 a.m. in New York, just like gold and silver---and from shortly after 10 a.m. EST, it chopped sideways in a fairly tight range into the 5:15 p.m. close of electronic trading.  Platinum closed up an even $20.

Palladium took another run at the $800 spot price mark, but ran into a willing seller about 9:45 a.m. EST when it looked it was about to blast above that mark.  After that, it got sold back down to unchanged on the day.

The dollar index closed late on Monday afternoon in New York at 89.15.  From there it didn't do much until it spiked up to its 88.30 high at the 8:20 a.m. EST Comex open.  Then it headed south with a vengeance, hitting its 87.84 low minutes after 11 a.m. in New York.  After that, it didn't do a lot, closing at 87.89---down 26 points on the day.

The gold stocks opened unchanged---and rallied a percent or so within the first hour---and then drifted quietly lower until 12:30 p.m. EST.  The gold price began to rally at that point, as did the gold shares---and they really put on a burst in the last 30 minutes of the New York trading session, as the HUI closed up a very respectable 3.94%.

The silver equities followed a very similar pattern---and Nick Laird's Intraday Silver Sentiment Index closed up 4.40%.

The old wives' tale that big movement in the precious metal shares is a precursor to a rally in the metals themselves is about to be put to the test.  Here's an article from the mining.com Internet site headlined "Gold stocks surge in massive volumes" that reader M.A. sent our way late last night.

The CME Daily Delivery Report showed that 4 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories on Friday.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in November dropped by 7 contracts and is down to 4 contracts still open.  Silver o.i. dropped from 28 contracts down to 2 contracts.  These few contracts are what is posted for delivery on Friday in the previous paragraph, so the November delivery month is done.

There were no reported changes in GLD yesterday---and as of 9:35 p.m. EST yesterday evening, there were no reported changes in SLV, either.

I note that the folks over at the shortsqueeze.com Internet site updated their short positions for both GLD and SLV for the period ending November 15---and here's what they had to say.

The short position in SLV blew out by 17.53%, from 14.85 million shares/troy ounces to 17.45 million shares/troy ounces.  The new short position represents 542 metric tonnes of the stuff, or approximately 1,745 Comex good delivery bars---eight days of world silver production.

In GLD, the short position increased by 17.37%---from 1.51 million troy ounces, to 1.77 million troy ounces.  That's 55 metric tonnes of the stuff.

Allowing a short position to exist in a physical metal fund is one of several reasons I wouldn't own either one of these ETFs.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs with data as of the close of trading on Friday, November 21.  Their gold ETF declined by 19,567 troy ounces---and their silver ETF also declined, by 21,585 troy ounces.

There was another decent sales report from the U.S. Mint yesterday.  They sold 4,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 211,500 silver eagles.

There wasn't much gold movement over at the Comex-approved depositories on Monday.  There was 2,290 troy ounces reported received---and 2,432 troy ounces shipped out.

It was totally different in silver, of course, as 943,300 troy ounces were received---and 1,357,141 troy ounces were shipped out.  The link to that action is here.

I have a decent number of stories in today's Critical Reads section---and I hope you have the time to read all the ones that you find of interest.

¤ Critical Reads

This Is What $11.71 Trillion Worth of Household Debt Looks Like

Household debt rose to $11.71 trillion in the third quarter.

According to the New York Federal Reserve's latest Household Debt and Credit report, household debt in the third quarter rose 0.7%, or $78 billion, to $11.71 trillion, up from $11.62 trillion in the second quarter.

Overall, household debt is below its $12.68 trillion peak reached in the third quarter of 2008.

"Outstanding household debt, led by increases in auto loans, student loans and credit card balances, has steadily trended upward in recent quarters," said Wilbert van der Klaauw, senior vice president and economist at the New York Fed. "In light of these data, it appears that the deleveraging period has come to an end and households are borrowing more."

Today's first story appeared on the businessinsider.com Internet site at 11:40 a.m. EST yesterday---and I thank reader U.D. for passing it around yesterday evening.

How the World's Most Leveraged Hedge Fund Got Away with Insider Trading

While everyone is aware by now that the biggest component of SAC's abnormal outperformance over the years was its recourse to "information arbitrage" and its reliance on "expert networks", both of which managed to send the SAC logo to Federal Purgatory, if not the hedge fund's infamous art-collecting founder, one player in the massive hedge fund insider trading ring which was busted over the past few years, involves the one hedge fund, which as we have shown in the past, has the highest leverage in the U.S. if not the world: Citadel, with $142 billion in regulatory assets.

Today, we learn just how Ken Griffin's conglomerate also got its hands clean, and more importantly, how it managed to avoid any legal consequences.

As Bloomberg reported overnight, "the FBI files spell it out: An analyst at Citadel LLC, the hedge fund with $23 billion in capital invested globally, told agents he made millions of dollars trading on information from a company insider."

Normally, this would have been enough for the FBI to raid said hedge fund and at least settle for a fine, if not pursue outright prison time for those involved. This time, however, it did not.

This longish commentary about the Federals Reserve's private hedge fund was posted on the Zero Hedge Web site at 11:32 a.m. EST yesterday morning---and I thank Manitoba reader U.M. for sending it our way.

Forex Rigging Probe: US Prosecutors to Grill London Traders

U.S. prosecutors are set to travel to London in the forthcoming weeks to probe City traders about currency market manipulation. However, British prosecutors are yet to file a criminal charge against UK financiers who rigged the rates.

U.S. Department of Justice (DOJ) officials will interview a group of current or former HSBC employees, along with other City bankers, as part of their criminal investigation into foreign exchange market (Forex) manipulation, inside sources told Reuters on Tuesday

The largely unregulated $5.3-trillion-a-day foreign exchange market is used by corporate treasurers and asset managers to value their funds.

The American body is currently investigating whether banks colluded to alter Forex rates and bolster their profits in the process. Such a maneuver is a violation of American and U.K. fraud and anti-trust laws. Prosecutors are also investigating whether traders deliberately misled their clients.

This offering from the Russia Today Web site appeared there at 5:43 p.m. Moscow time on their Tuesday---and it's the first contribution of the day from Roy Stephens.

Symantec Discovers "Regin" Spy Code Lurking on Computer Networks

Security researchers say they have discovered a sophisticated piece of malicious code spying on researchers, governments, businesses, and critical telecommunications infrastructure since 2008.

The malware, called Regin, was first discovered by Symantec, the antivirus company, which released a white paper describing its findings on Sunday. On Monday, The Intercept, a digital magazine started by the journalist Glenn Greenwald, reported that the Regin malware is part of a decade-long joint operation by the National Security Agency and its British counterpart, the Government Communications Headquarters, or G.C.H.Q. The Intercept report is based in part on disclosures from former N.S.A. contractor Edward J. Snowden.

“In the world of malware threats, only a few rare examples can truly be considered groundbreaking and almost peerless,” Symantec wrote. “What we have seen in Regin is just such a class of malware.”

Symantec found evidence that the malware has been used on targets in 10 countries, primarily Saudi Arabia and Russia, as well as Pakistan, Afghanistan, India, Mexico, Ireland, Belgium and Austria. The Intercept reported Monday that the malware had been used to spy on companies in the European Union, notably Belgacom, a partly state-owned Belgian phone and Internet provider.

This very interesting article appeared on the New York Times Web site on Monday at 12:42 p.m. EST---and it's the second offering of the day from Roy Stephens.

France Postpones Mistral Delivery to Russia over Ukraine "Until Further Notice"

President Francois Hollande has decided to suspend delivery of the first Mistral-class ship to Russia "until further notice," citing the situation in Ukraine as the reason, media reported an Elysee Palace statement.

"The President of the Republic believes that the current situation in the east of Ukraine still does not allow the transfer of the first Russian Mistral-type ships to Russia," a statement from the Elysée Palace said.

In this regard, Francois Hollande felt it necessary to postpone the new order to study the request for permission to supply Russia with the first Mistral vessel, the communique informed.

Russian Deputy Defense Minister Yury Borisov said it will patiently wait for the fulfillment of the contract, RIA Novosti reports.

This news story put in an appearance on the Russia Today Internet site at 11:50 a.m. Moscow time on their Tuesday morning, which was 3:50 a.m. EST on  Monday morning.

EU Is "Aged and Weary," Pope Says

In a highly anticipated speech attended by almost all members of the European Parliament, pope Francis on Tuesday (25 November) criticised the E.U.'s treatment of migrants, its institutions, and its focus on growth and consumerism.

“Despite a larger and stronger Union, Europe seems to give the impression of being somewhat aged and weary, feeling less and less a protagonist in a world which frequently regards it with aloofness, mistrust, and even, at times, suspicion”, he said during his speech in Strasbourg.

He likened the European continent to “a grandmother, no longer fertile and vibrant”.

Francis also signalled a “growing mistrust on the part of [EU] citizens towards institutions … engaged in laying down rules perceived as insensitive to individual people, if not downright harmful.”

No flies on this guy, as he understands the situation perfectly---and isn't afraid to say so.  This article appeared on the euobserver.com Internet site at 3:34 p.m. Europe time Tuesday afternoon---and it's also courtesy of Roy Stephens.

Jean-Claude Juncker's €315 Billion "New Deal" Dismissed as a Subprime Gimmick

The European Commission has launched a €315bn “New Deal” to pull Europe out of its economic slump over the next three years, but will provide almost no new money of its own and is relying on subprime forms of financial engineering.

The shopping list of investments and infrastructure projects will take months to sift through, and the stimulus will not reach meaningful scale until 2016. The scheme has already run into a blizzard of criticism. It depends on leverage that increases the headline figure by 15 times, leaving EU taxpayers bearing the heaviest risk while private investors are shielded from losses.

Jean-Claude Juncker, the Commission’s embattled new president, has made the plan the centre piece of his “last chance” drive to restore popular faith in the E.U. project, but it risks becoming an emblem of paralysis and failure instead.

“The money is chicken feed and it won’t do anything to kick-start growth,” said Professor Charles Wyplosz, from Geneva University. “It is unbelievable they are doing this rather than real fiscal expansion. The private sector will just take governments to the cleaners.

This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site at 6:21 p.m. GMT yesterday evening---and it's courtesy of South African reader B.V.  It's worth your while if you have the time---and the interest.

German Foreign Minister: "Crimea Will Remain a Source of Conflict"

German Foreign Minister Frank-Walter Steinmeier warned recently that leaders should tone down their rhetoric on Russia. SPIEGEL asked him whether his comments were directed at Chancellor Merkel and how he believes the conflict with Russia might develop.

German Chancellor Angela Merkel is a master at keeping her cool, even when the pressure becomes almost unbearable. This may explain why a speech she gave at the Lowy Institute for International Policy in Sydney, immediately following the G-20 summit in Brisbane, turned so many heads. Her comments in Sydney were the clearest indication yet that she is losing patience with Russia. "Outdated thinking in terms of spheres of influence which tramples international law underfoot must not be allowed to prevail," she said. "Russia is violating the territorial integrity and the sovereignty of Ukraine."

During the audience discussion after the speech, Merkel warned that "we're not just talking about Ukraine. We're talking about Moldavia, about Georgia. If things go on, we'll be talking about Serbia and the Western Balkans."

Coming as it did just hours after an interview with Russian President Vladimir Putin was aired on German television, the speech was seen as a direct and forceful response. And it seemed to make German Foreign Minister Frank-Walter Steinmeier uncomfortable. It is important, he said not long after Merkel's comments, "that in our use of language in public, we do not eliminate our chances of contributing to the easing of tensions and to the mitigation of conflict."

This interview/article was posted on the German website spiegel.de at 12:34 p.m. Europe time on Tuesday---and it's definitely a must read if you're a serious student of the New Great Game.  It's courtesy of Roy Stephens once again, for which I thank him.  The headline above is new---and certainly more provocative than its original title, which was German Foreign Minister Steinmeier on Russia and Ukraine.

Russia’s Eighth Humanitarian Convoy to Deliver Aid to Eastern Ukraine on Nov. 30

The eighth convoy of Russia’s Emergency Situations Ministry is expected to deliver humanitarian aid to Donbass on November 30, the Russian deputy emergency situations minister said on Tuesday.

“Over 100 vehicles are due to cross the border on Sunday. They are to deliver 1,000 tons of cargo,” Vladimir Stepanov said.

The convoy will consist of building materials needed for the destroyed houses: glass, slate, roofing material and also fuel.

Stepanov said one half of vehicles will go to Lugansk while the other one to Donetsk. “We know exactly where this aid will go,” Stepanov said.

This short article appeared on the itar-tass.com Internet site at 10:29 a.m. Moscow time on their Tuesday morning---and once again I thank Roy Stephens for sharing it with us.

Russia Looks to the East, but It Still Needs Europe

Anyone reading the Western business press relating to Russia recently will be left with the distinct impression that global trading relations with this part of the world are undergoing a momentous and irreversible shift east. Russian business ties with the West are severed, sanctioned and broken. Asian players, most prominently the Chinese corporations, are set to step in and fill the gaps left by retreating Western investment.

Certainly the recent fanfare of political handshaking ceremonies and deal signings would support such a proposition. The APEC Summit in Beijing in November saw Moscow and Beijing conclude an agreement between state-backed companies Gazprom and China National Petroleum Corporation (CNPC) to supply gas from Western Siberia to China, from gas fields currently piped to Europe. This follows hot on the heels of the “Power of Siberia” project agreement between these companies signed in May with a purported $400bn deal value. If both projects are completed, overall volumes of gas supplies to China could exceed those supplied to Europe over the medium term.

Nonetheless, there remains a high level of scepticism in many business circles, including many Russian ones, as to how real or achievable this pivot east really is, at least in the short to medium term. The reality is that Europe will remain by far Russia’s largest export market for gas and as a bloc its largest overall trading partner for years to come. U.S. trade with Russia is much lower, but even so the U.S. remains Russia’s single largest foreign direct investor for infrastructure and power projects.

The Gazprom-CNPC deals are still just broad framework agreements, the latest milestones in years of protracted negotiations, with much planning and negotiation of the underlying contracts still to come. When speaking to bankers and professional advisers in Moscow, Beijing and Shanghai, there is a large element of wait-and-see about the realistic levels of deal flow that might emanate from Russian-Asian business cooperation over the next few years, as compared to those relating to Russian-Western trade and investment.

This opinion/analysis piece appeared on the russia-insider.com Internet site early yesterday morning Moscow time---and it's the second offering of the day from reader B.V.

Remarks by Foreign Minister Sergey Lavrov at the XXII Assembly of the Council on Foreign and Defence Policy, Moscow, 22 November 2014

1)  Lavrov is considered very much a "moderate" and his language has always been strictly diplomatic.  So when you read Lavrov, just imagine what folks in other Russian ministries are thinking.
2) Lavrov makes no secret of his view of the USA and of his plans for the future of our planet.  When you read his words, try to imagine what a US Neocon feels and thinks and you will immediately see why the US elites both hate and fear Russia.
3) Finally, Lavrov openly admits that Russia and China have forged an long-term strategic alliance (proving all the nay-sayers who predicted that China would backstab Russian wrong).  This is, I would argue, the single most important strategic development in the past decade.
4)  Finally, notice the clear contempt which Lavrov has for a pseudo-Christian "West" which dares not speak in defense of persecuted Christians, denies its own roots, and does not even respect its own traditions. Russia did not want this conflict.  Russia did everything in her power to prevent it.  But the West left Russia no choice and Russia now openly declares her willingness to fight and prevail.  

Of all the non-precious-metals related stories in today's column, this is by far the most important---and falls into the absolute must-read category, especially for all serious students of the New Great Game.  It was posted on the vineyardsaker.blogspot.ca Internet site yesterday---and I thank Roy Stephens for bringing it to my attention---and now to yours.

Saudi Sights Set on US Shale at Crucial OPEC Meeting

OPEC's biggest crude producer Saudi Arabia will have its sights set on the upstart US shale oil business at a crucial cartel meeting to debate possible output cuts on Thursday.

Analysts say the kingdom is content to see shale oil producers -- and even some members of the cartel -- suffer from low prices and will resist pressure to reduce output and shore up the cost of oil.

A barrel of crude has plunged by about one third in value since June to around $80 in an increasingly competitive market.

Saudi Oil Minister Ali al-Naimi was silent about his government's intentions Monday as he arrived in Vienna ahead of the OPEC gathering.

This AFP story, filed from Riyadh, showed up on the news.yahoo.com Internet site late on Monday evening---and it's courtesy of Casey Research's own Dennis Miller.

Four Major Oil Producers Say Current Oil Prices Too Low

Russia, Venezuela, Saudi Arabia, Mexico agreed that current oil prices were too low and decided to take coordinated actions to revert the trend, Venezuela’s foreign minister said.

Venezuelan Foreign Minister Rafael Ramirez attended energy talks in Vienna with officials from Russia, Saudi Arabia and Mexico in Vienna earlier in the day.

“Everyone agreed that the current price is bad. We will continue our work. Everyone is concerned about the price,” he told reporters after the talks.

“The price should be $100 per barrel, this is a fair price,” he said.

This news item put in an appearance on the sputniknews.com Internet site at 7:15 p.m. Moscow time on Tuesday evening---and is the final offering of the day from Roy Stephens, for which I thank him on your behalf.

CFTC Tells CME Group to Work More on "Spoofing" Detection

CME Group Inc, the world's largest futures market operator, should continue to develop strategies to detect an illegal manipulative trading practice known as "spoofing," the U.S. Commodity Futures Trading Commission said on Monday.

Spoofing involves rapidly placing orders to create the illusion of market demand. Unsuspecting traders are then tricked into buying or selling at artificial prices, only to later find that the orders were canceled.

The practice gained notoriety last month after high-frequency trader Michael Coscia was charged with manipulating commodity futures prices in the first U.S. federal criminal prosecution of spoofing.

This Reuters article, filed from Chicago, was posted on their Web site at 6:51 p.m. EST on Monday evening---and it's courtesy of Manitoba reader U.M.

Grant Williams: How Could It Happen?

In the new edition of his Things That Make You Go Hmmm... letter, Singapore fund manager Grant Williams writes some future history that regards GATA favorites Alasdair Macleod and Koos Jansen as prophets of a Chinese-engineered golden age -- an age golden, at least, for those who heeded the prophets and got their gold in time.

Williams' letter is headlined "How Could It Happen?" and it was posted at the mauldineconomics.com Internet site yesterday sometime--and I found it embedded in a GATA release.

FT's Tett: Gold “Tangible” and “Clear”; People “Unnerved” About “Money” in “Bottomless Cyber Space”

While we agree that Greenspan's legacy is a tarnished one, we also recall his statement to Marc Faber at the New Orleans Investment Conference last month where he said "I never said the central bank is independent."

At that conference he also stated that the Federal Reserve was sitting on "a pile of tinder" and that gold would go "measurably higher."

Gillian Tett has a record of unbiased analysis and commentary regarding the gold markets. In 2011 she suggested that it would be "foolish to simply deride or ignore" the Gold Anti-Trust Action Committee (GATA). 

GATA's contention of manipulation of the gold markets have now been borne out.

Tett is highly respected both in journalism but also in financial and economic circles. In her previous roles, she was U.S. Managing Editor and oversaw global coverage of the financial markets. In March 2009 she was Journalist of the Year at the British Press Awards. In June 2009 her book Fool’s Gold won Financial Book of the Year at the inaugural Spear’s Book Awards.

This Financial Times story by Gillian Tett received 'the treatment' from Mark O'Byrne yesterday.  Gillian's FT story was the headline to my Friday column---and even though Mark's efforts are a day or so late, they definitely aren't the proverbial dollar short, as I consider Mark to be one of the best writers on the Internet---and his analysis of this news item in the current financial environment are definitely worth your time.  I found it on the goldcore.com Internet site yesterday.

Nick Laird: Gold Algos Run Wild

Goldbugs hearts were racing today as gold roared up whilst Comex was closed for 1/2 hour. The price started leaping once it got over $1,200 & topped out at the price of $1,466.38 - a 22% rise of$270.

It was live on multiple websites and data feeds across the web so many got to watch the excitement. Goldbugs watched the prices on NetDania, iFeed and eSignal data feeds and on websites such as www.usagold.com and www.bulliondesk.com so the price increase appeared real.

Comex shorts must have been wetting themselves.

What must be asked is what was happening to these live quotes that gold rose almost $270 on multiple data feeds? Who was doing the watching---and who did the monitoring---and then the correction? Someone in control was watching these live feeds and reacting to them? What was happening to the quote stacks - who was buying/selling - did it really happen?

Well, dear reader, I was totally oblivious to this amazing event, as I only follow Kitco at home---and we even use Kitco pricing at the store.  I didn't even hear about it from any of my readers until early yesterday evening.  The first I heard of it was when Nick sent me this story very late yesterday afternoon Mountain Standard Time.  It's definitely worth looking at---and it's posted on the sharelynx.com Internet site.  Nick also sent along the Zero Hedge commentary on it---and it's headlined "Something Appears to Be Going On with Gold". [And as of 4:30 a.m. EST this morning, I haven't heard another thing about it. - Ed]

French Populist Leader Joins Gold Repatriation Campaign

Marine Le Pen, leader of the populist National Front political party in France and likely France's next president if the country should last until another election, has picked up the gold repatriation issue by writing to the governor of the central bank, the Banque de France. Le Pen's letter, translated from French to English, is posted at her party's Internet site.

An official of the central bank disclosed last year that it is secretly trading gold for its own account and for other central banks "nearly on a daily basis."

That same official said this month that central banks are managing their gold reserves "more actively" these days, while worrying more about "auditability," perhaps since the gold sometimes is construed to be in more than one place at the same time.

This commentary appeared on the gata.org Internet site yesterday---and it's definitely worth reading.  And although I thank Chris Powell for wordsmithing 'all of the above'---the first person through the door with this yesterday was reader U.M.---and she also sent along the Zero Hedge commentary on this headlined Here Comes France: Right-Wing Leader Marine Le Pen Demands Central Bank Repatriate French Gold.  It's worth reading as well.

Guardian's Report on Swiss Gold Initiative Quotes GATA Consultant Koos Jansen

The Swiss like referendums: there were 11 last year and there have been nine more this year, on subjects ranging from who pays for abortions to whether the state should buy a certain type of new fighter aircraft.

This Sunday there are three more, but one has attracted more attention than most because there are fears that if it wins majority support it could trigger a worldwide gold rush.

Five million Swiss voters are to decide on a proposal that would force the central bank to triple its gold reserves. The vote is being watched closely by financial markets and governments around the world. ...

"Gold continues to trigger impetuous and irrational reactions in many people," Sergio Rossi, professor of macroeconomics and monetary economics at Fribourg University, told the Swiss news agency SDA.

This Swiss gold referendum-related story appeared on theguardian.com Internet site at 9:24 p.m. GMT yesterday evening---and I found it posted on the gata.org Internet site.  The article's real headline reads Fears that ‘dangerous’ Switzerland referendum could spark gold rush.

Indian Government Investigating Black Money in Swiss Banks Entering India Via Gold Import

Following reports of a sharp increase in the import of gold from Switzerland, Indian authorities have started investigating whether unaccounted money parked by Indians in banks these is entering India in the form of gold.

From this year, Swiss authorities have started disclosing that country’s import, as well as export, of precious metals. Between January and October, Switzerland exported 380 tonnes of gold to India. In January, India’s share in Switzerland’s overall gold and silver exports stood at 14.1%. This has increased to 16%.

So far this year, India has imported 27.7% of the gold exported by Switzerland; in January, this was only 15%.

The Centre has asked the customs department and the Reserve Bank of India to tally the gold imported from Switzerland with export data released by Swiss authorities and the payment for gold by India to banks and traders in Switzerland in March. A source said if both sets of data matched, one could conclude there was no direct relation between the gold imported from Switzerland to India and the black money parked in that country. “We believe even if the black money parked there is entering India through gold import, it will not come directly from Switzerland; importers will route that through Hong Kong of Dubai to hide the true identity.”

This interesting story, filed from Mumbai, was posted on the business-standard.com Internet site late Tuesday evening IST---and it's another offering from reader U.M.

China’s Gold Imports Through Hong Kong Rise for a Third Month on Jewelry Sales

China’s gold imports from Hong Kong rose for a third month as increasing jewelry sales countered weakening demand for the metal as an investment amid falling prices.

Net imports totaled 69 tonnes in October, compared with 61.7 tonnes the previous month and 129.9 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department today. Exports to the territory from China rose to 42.4 tons in October from 30.1 tons in September, the statistics department said in a separate statement. The figures don’t represent all imports of the metal by China, which doesn’t publish such data.

The value of China’s jewelry sales in October rose 2.9 percent from the previous month, according to the National Bureau of Statistics. Bullion fell below $1,200 an ounce last month and erased its gains for the year as the U.S. economy improved and the dollar strengthened on prospects for higher interest rates, damping demand for precious metals as an inflation hedge.

“Higher jewelry sales for the third month defied some earlier forecasts that Chinese demand would falter after falling prices,” Liu Xu, an independent gold analyst in Beijing, said by phone before the data was released.

As usual, the official import data through Hong Kong was leaked early---and here's the story about it in this Bloomberg article that was filed from Beijing at 3:43 a.m. Denver time on Tuesday morning.  Nick Laird won't be able to update his chart on this until the official numbers are released in the first week of December.  This is another gold-related news item from reader U.M.

Chow Tai Fook Jewelry Group Plots New Grounds to Chase China’s Tourists

Chow Tai Fook Jewellery Group Ltd. (1929) plans to open new stores outside its main markets in Hong Kong and China, as it chases its Chinese customers outside familiar territory.

“While overseas travel is increasingly popular among the Mainland Chinese, it means more and more of their shopping budgets are spent in the new tourist destinations outside our major markets,” the world’s largest listed jewelry chain said in a statement to the Hong Kong Stock Exchange yesterday.

Chow Tai Fook plans to double its number of points of sales, including concessionaires and standalone outlets, in the next 10 years. Stores in tourist hotspots outside mainland China and Hong Kong will also be its target “to capture the spending power of the affluent outbound Mainland Chinese tourists,” it said.

The expansion plan comes as the jeweler said pro-democracy protests held near its Hong Kong stores curtailed Chinese tourists. Travelers from China splurged the most on tax-free shopping last year, accounting for 27 percent of spending, according to a study by tax-refund points operator Global Blue.

This very interesting gold-related news item, filed from Hong Kong, appeared on the Bloomberg Web site at 6:52 p.m. Mountain Standard Time yesterday evening---and once again it's courtesy of reader U.M.

Lawrence Williams: Global Gold Supply in Deficit This Year, Even More So Next

In a previous article we have already shown that Indian and Chinese gold demand between them currently account for annual gold consumption levels of perhaps as much as 3,100 tonnes, roughly equivalent to global new mined gold production as recorded by the World Gold Council (3,115 tonnes over the 12 months to end September).

The Chinese and Indian figures we have recorded are probably themselves understated – with Indian consumption swelled by smuggled gold imports to avoid the 10% import duty and take advantage of the gold premiums on the Indian markets. China’s figures are also understated in that they are mainland China figures and do not include Hong Kong net gold imports which probably should add another 40-50 tonnes to the figure given that Hong Kong is technically part of China, but in terms of economic statistics, including gold net imports, it is treated as an independent state.

For the 12 months to end September this year, Asia, other than China and India, is reported to have consumed some 280 tonnes, Middle East 218.6 tonnes, Turkey 121.9 tonnes, Russia 73.8 tonnes, USA 174.3 tonnes, Europe ex-CIS 272.1 tonnes and Other (countries not detailed in the main table) 425.3 tonnes, giving us the overall total of 1,566 tonnes.

The WGC’s Gold Demand Trends data puts global supply for the 12 months to end-September over and above new mined production at 1,143.5 tonnes. Taking our own figures for Chinese and Indian demand as being approximately equal to global new mined production that suggest to us that gold supply is going to be in deficit this year to the tune of around 420 tonnes plus, which is fairly substantial in the supply/demand equation (around 10%).

Lawrie correctly concludes that the reason that gold prices aren't higher is because of the antics of JPMorgan et al in the Comex futures market.  This must read commentary showed up on the mineweb.com Internet site yesterday---and it's the final offering of the day from Manitoba reader U.M.---and I thank her on you behalf.

John Hathaway: Monetary Tectonics

The modern-day central banker trades with counterparties that are giant commercial banks with derivative books of disturbing scale and complexity. It seems impossible that these commercial exposures could be constructed and maintained without the knowledge and complicity of the official sector. For example, Deutsche Bank, already a defendant in 1,000 lawsuits, claims derivative exposure that is 20 times the GDP of Germany and 5 times that of the entire Eurozone. It is not a great leap to suggest that central-bank traders and their megabank opposites – spawn of the same gene pool, schooled in the same institutions, career paths intertwined, frequenters of the same conferences, and just a speed-dial away – are ideologically indistinguishable and intellectually and morally corrupt in equal proportion. We applaud the efforts of litigators and plaintiffs already in process and those in the wings, and look forward to the depositions and discoveries yet to come.

Whether the eventual cessation of manipulative practices translates into a change of trend for the gold price remains to be seen, although it seems logical that the bullish consensus for financial assets equates to a complacent and very large short position in gold that will have to be covered (37.5 million troy ounces). More important, as we demonstrated in “Let’s Get Physical”, there is a massive asymmetry between paper claims on gold and physical metal. Should Western investment demand, accustomed to acting only through financial instruments such as ETFs, futures contracts, and derivatives, revive only modestly, the fragile link between paper claims and the real thing – which has been stretched and contorted by extreme rehypothecation (the use by financial institutions of clients’ assets, posted as collateral) – could easily shatter. The major winners in a systemic repricing of gold will be those who own or produce the real thing.

John's got such a way with words---and this right-on-the-money commentary was posted on the tocqueville.com Internet site yesterday---and I thank him for sliding a copy of it into my inbox before I found it on my own.  It's an absolute must read of course---and probably deserves a second read as well.

¤ The Funnies

¤ The Wrap

The U.S. Mint continues to produce and sell Silver Eagles at their maximum production capacity, but sales are still rationed, indicating more demand than supply. As with the unusual demand for wholesale bars in the COMEX silver inventories, the great demand for Silver Eagles is usually a free market mandate for higher prices according to the law of supply and demand. But the operative term is free market mandate and, once again, the only plausible explanation for great silver demand and lower prices is a market that is being manipulated.

Still, we have crossed the 40 million oz mark in Silver Eagles sold this year, only the second such year in the 28 year history of the program. And yes, I still believe it has not been broad retail demand that has accounted for the record Silver Eagle sales these past few years, but a certain Mr. Big. For some reason, Mr. Big hasn’t taken a shine towards Gold Eagles, as year-to-date sales are down close to 40% this year compared to last and even more compared to the past few years. I suppose if you are going to manipulate prices more in one commodity compared to another, it would follow that you would buy much more of the more manipulated item – silver in this case. - Silver analyst Ted Butler: 22 November 2014

Except for the rather strange down/up move after the Comex open yesterday, nothing much should be read into yesterday's price action.  However, the rather strange goings-on in the gold price feeds on many other Internet sites yesterday that Nick Laird pointed out should not be forgotten---but as of this moment, I've heard nothing further about it.

Here are the 6-month charts for the 'Big 6' commodities.  Only palladium is currently above its 50-day moving average---and Dr. Copper set a new low price tick for this move down, but only by a fraction of a cent.  WTIC came close to a new low---and with the OPEC meeting in Geneva tomorrow, I'm sure that we'll see further volatility in the oil price, along with natural gas.

Yesterday was the day that the large traders had to be out of their December positions in the Comex futures market---and everyone else has to be out by the close of trading today, as there won't be much in the way of volume on Thursday, as the markets are closed in the U.S.  Friday is First Notice Day for the December delivery month---and I'll have all of that, plus the latest Commitment of Traders data in Saturday's missive.

And as I write this paragraph, the London open is about 20 minutes away.  The gold price got sold down below the $1,200 spot mark shortly after trading began in the Far East on their Wednesday morning---and its rally attempt above that mark shortly after 3 p.m Hong Kong time met the same fate.  Net volume is amazingly light at just under 6,000 contracts, with most of the trading now in the new front month, which is February.

Silver got sold down 15 cents or so, with its Far East low coming about 12:30 p.m. Hong Kong time---and it hasn't done much since.  Silver's net volume is a shockingly low 1,500 contracts and, like gold, the greater percentage of the trading activity is now in silver's new front month, which is March.

Based on these net volumes, nothing should be read into the current prices of either metal.

The platinum price isn't doing much, but palladium is crawling towards the $800 spot price mark once again---and I would guess that this rally attempt will meet the same fate as the one yesterday.

The dollar index isn't doing a thing.

Yesterday was the cutoff for this Friday's Commitment of Traders Report---if there is a report, that is.  I'll ask Ted today, as he keeps track of such things---and I'll let you know tomorrow.  Just eyeballing the charts for the reporting week just past, I'd guess that we'll some minor deterioration in the short positions in both silver and gold, but with the big volume/rollover activity we'd had in the last several days, I certainly wouldn't bet the farm on that outcome.

And as I send today's effort off to Stowe, Vermont at 5:20 a.m. EST, I see that all four precious metals have been sold down off their highs of the day---and only palladium is up from Tuesday's close in New York.

Net volume in gold is still very tiny, about 9,000 contracts or so---and silver's net volume is barely over the 2,000 contract mark, so nothing much should be read into the current price action except for the fact that palladium's attempt to break through the $800 price mark was turned back once again, although the trading day is still young.

The dollar index is up about 10 basis points.

Based on what I see at the moment, it seems that there won't be much net volume today, as traders in New York will be anxious to get out of the office early, as I'm sure they will have their sights set on an early start to what for most will be a long weekend.

That's all I have for today which, like yesterday, is more than enough.  I wish all my American readers a happy Thanksgiving---and if you're one of the lucky ones, a good long weekend as well.

See you here tomorrow.

Ed Steer

]]>
Wed, 26 Nov 2014 10:11:00 +0000
<![CDATA[The Swiss Referendum on Gold: What’s Missing From the Debate]]> http://www.caseyresearch.com/gsd/edition/the-swiss-referendum-on-gold-whats-missing-from-the-debate/ http://www.caseyresearch.com/gsd/edition/the-swiss-referendum-on-gold-whats-missing-from-the-debate/#When:06:22:00Z "We're still 'locked and loaded' for a big up-move"

¤ Yesterday In Gold & Silver

I wouldn't read too much into yesterday's gold price action if I were you.  The only thing that was noteworthy was that gold's thin toe-hold on the $1,200 spot price mark disappeared before the London trading day began---and even the feeblest attempt to get back above that price was turned away.

With Thursday being Thanksgiving in the U.S., we are now in the midst of the final three roll-over days out of the December contract and, not surprisingly, volumes are pretty heavy---with most of it being of the roll-over variety.

With gold trading within a ten dollar price range, the high and low ticks aren't worth the effort of looking up.

Gold finished the Monday session at $1,198.30 spot, down $3.80 from Friday's close.  Gross volume was close to a quarter of a million contracts, but once the roll-overs were subtracted out, the volume crashed to only 74,000 contracts---which is a familiar occurrence as we approach every first notice day which, for December, is Friday.

The silver price action had a bit more shape to it---initially down, of course, with the low tick coming shortly before 1 p.m. GMT in London---and about twenty-five minutes before the Comex open.  The subsequent rally lasted until around 8:20 a.m. EST---and the was pretty much it for the remainder of the New York session.

The low and high ticks were reported by the CME Group as $16.245 and $16.47 in the December contract.

Silver closed in New York yesterday at $16.465 spot, up 1.5 cents on the day.  Gross volume was well north of 90,000 contracts, but the lion's share of that was roll-overs---and it all netted out to 18,500 contracts, which is very light.

The platinum price chopped around unchanged up until shortly before 11 a.m. EST in New York---and on the news that the metal was going to be in a 1.33 million ounce deficit for the 2015 calendar year, some kind soul peeled 20 bucks off the price by noon in New York.  The low tick of $1,193 spot came moments before the 5:15 p.m. close of electronic trading, but it got bid back above the $1,200 spot price mark right at the close.  It finished the Monday session at $1,202 spot, down twenty bucks from Friday.

The palladium price did nothing until shortly before 2 p.m. Zurich time---and then began to rally, but got stopped short of the $800 spot price mark in late morning trading in New York.  It got sold down to a three dollar loss until around 3 p.m. EST in New York, but managed to rally a bit, closing up a buck.  The structural deficit in palladium for 2015 is just as bad as platinum, if not worse.

The dollar index closed late on Friday afternoon in New York at 88.265---and didn't do much during the entire Monday trading session, closing at 89.154---which was down 11 basis points.  Nothing to see here.

The gold stocks opened down a bit, but rallied back into positive territory, albeit briefly, with their highs of the day coming just before 10:30 a.m. EST.  It was all down hill from there until shortly after 2 p.m.---and from there they chopped sideways, as the HUI closed down 1.33%.

Despite the fact that silver didn't do all that badly yesterday, the silver equities never got a sniff of positive territory---and were down over 3 percent at one point.  By the end of the Monday trading session, Nick Laird's Intraday Silver Sentiment Index had shaved its loses to 'only' 2.13%.

The CME Daily Delivery Report showed that 7 gold and 28 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  Scotiabank was the only long/stopper in both metals---and the only short/issuer in silver was Jefferies.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in the November contract dropped from 20 to 9 contracts---and silver's o.i. for the same month dropped from 88 down to 30 contracts.  Once you subtract out the deliveries in the previous paragraphs, only 2 gold and 2 silver contracts are left in the month.

There were no reported changes in GLD on Monday---and as of 7:53 p.m. EST yesterday evening, there were no reported changes in SLV, either.  But when I checked the iShares.com Internet site at 3:06 a.m. EST this morning, I noted that an authorized participant withdrew 1,341,418 troy ounces.

There was a decent sales report from the U.S. Mint yesterday.  They sold 3,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---an another 426,500 silver eagles.

There wasn't much activity in gold over at the COMEX-approved depositories on Friday.   No gold was reported received---and only 6,028 troy ounces were shipped out.

In silver, there was 96,672 troy ounces reported received---and 387,118 troy ounces shipped out.  The link to that activity is here.

I have a lot of stories today---and I hope you find some that you like.

¤ Critical Reads

Global Business Confidence Collapses To Post-Lehman Lows

As we noted before, despite record high stock prices and talking-heads imploring investors to believe CEOs are confident, they are not (consider the clear indication of a lack of economic confidence from tumbling capex and soaring buybacks), That is further confirmed today as Markit's survey of over 6000 firms showed optimism falling sharply in October, dropping to the lowest seen since the survey began five years ago. Hiring and investment plans were also at or near post-crisis lows, while price expectations deteriorated further. More worrying, perhaps, is the US is not decoupled whatsoever, with future expectations of US business activity at the lowest since the financial crisis.

The Markit Global Business Outlook Survey, which looks at expectations for the year ahead across 6,100 companies, showed optimism falling sharply in October, dropping to the lowest seen since the survey began five years ago. Hiring and investment plans were also at or near post-crisis lows, while price expectations deteriorated further.

This article appeared on the Zero Hedge website at 9:48 p.m. EST yesterday evening---and today's first news item is courtesy of Manitoba reader U.M.

Senator Elizabeth Warren vs. New York Fed's William Dudley

Senate Banking Subcommittee hearing in Washington, D.C., U.S., Nov. 21, 2014.
"Improving Financial Institution Supervision: Examining and Addressing Regulatory Capture"
Financial Institutions and Consumer Protection

“I don’t think anyone should question our motives or what we are attempting to accomplish.” William Dudley

"Change has to come from the top. Either you need to fix it Mr. Dudley or we have to get someone who will." Sen. Elizabeth Warren

What a greasy little slime ball this Bill Dudley is, but he's no match for Senator Warren.   This 9:30 minute youtube.com video clip was posted there last Friday---and I thank Toronto reader 'MichaelG' for sending it along.

Note to Dudley: Everyone Questions the NY Fed’s Motives – For Good Reasons

The NY Fed and Goldman have combined again to produce fingers scraping on a moral blackboard. The story is – not – told coherently in a New York Times piece.

I’ll comment on only two aspects of the incoherent story. First, contrary to the NYT portrayal of the story, there is typically no ambiguity about whether regulatory information is confidential and there was no ambiguity about the particular information that we read (albeit, not in the NYT) that the NY Fed employee leaked to his former colleague after he joined Goldman Sachs.

Second, the NY Fed’s head, William Dudley’s, response to the latest scandal was “I don’t think anyone should question our motives.” I will argue that given the NY Fed’s intolerable institutional conflicts of interest, and the defense of continuing that conflict by the NY Fed’s leadership, e.g., Dudley, everyone should the regional Feds’ motives.

The NYT article revealed that a former NY Fed employee “Rohit Bansal, the 29-year-old former New York Fed regulator, was [hired by Goldman]. At the time he left the Fed, Mr. Bansal was the “central point of contact” for certain banks.” You have to read two-thirds of the story before you learn Bansal’s name and reading the entire story doesn’t tell you his positions and duties at the NY Fed or Goldman.

William K. Black carves Dudley a new one in this article that appeared on the neweconomicperspectives.org Internet site last Thursday---and it's definitely worth reading.

Sprott's Thoughts: Interview with Ex-Congressman David Stockman

Q: David, can you explain how the ‘Fed put’ works on the stock markets and bond markets? How exactly does it translate into artificially higher stock prices and lower interest rates?

A:  The Fed injects massive amounts of liquidity into Wall Street through the dealer system – that is, the 21 authorized treasury-bond dealers. The liquidity comes in the form of new credits to their bank accounts supplied by the Fed in return for the governments bonds, notes and bills, and even the GSE (Government-sponsored entity) obligations that it buys from them. The credit that the Fed supplies to the dealers is manufactured out of thin air; therefore it expands total credits and liquidity in the system. The dealers use it to buy other types of securities – stocks, bonds, derivatives positions and so forth.

Historically, the purpose of the Fed’s open-market intervention in this form was to encourage the banking system to extend credit to the business and household sectors, thereby stimulating economic growth, as predicated by the Keynesian model. That was always a one-time parlor trick, however, because with each cycle of easing leverage ratios in the business and household sectors were ratcheted steadily higher. Household debt ratios, for example, went from 80 percent of wage and salary income prior to 1975 to 220 percent by 2007.

The problem today is that we have reached ‘peak debt.’ The household sector has $13.3 trillion of debts, even after the modest post- crisis deleveraging; the ratio is still sky-high at 180 percent of wage and salary income.

Consequently, the household sector has been unable to borrow more money, no matter how much credit the Fed has injected through the dealers. That’s very different from where this whole Keynesian financial bubble started 40 years ago when we had, more or less, clean household balance sheets.

This interview was posted on the sprottglobal.com Internet site yesterday sometime.

Terrorism laws: 'Time is right' for new police powers in the U.K.

Police and security services will get new powers as the U.K. faces a terror threat "perhaps greater than it has ever been", the home secretary says.

Unveiling a new counter-terrorism bill, Theresa May said the U.K. faced a security struggle "on many fronts".

Schools, universities and councils will be required to take steps to counter radicalisation.

Internet providers will have to retain Internet Protocol address data to identify individual users.

This article appeared on the bbc.com Internet site at 9:22 a.m. EST on Monday morning---and I thank International Man Senior Editor Nick Giambruno for passing it around.

E.U. still undecided on France deficit

Fiscal hawks and doves within the E.U. commission and member states continue to disagree on how to deal with France's budget deficit, seen as a credibility test for the E.U..

A meeting of heads of cabinets of E.U. commissioners over the weekend ended without a clear decision on possible sanctions for Paris for having again missed the three-percent deficit target for next year.

France has a projected deficit of 4.3 percent of GDP in 2015 and has announced it will meet the deficit target only in 2017.

Handelsblatt reports that a eurozone finance ministers meeting scheduled for next Monday (1 December) to discuss the E.U. commission's verdicts on the nationals budgets is likely to be postponed.

This story, filed from Brussels, showed up on the euobserver.com Internet site at 9:22 a.m. Europe time on their Monday morning---and I thank Roy Stephens for his first offering of the day.

Weidmann warns of "legal limits" on further moves by ECB

The head of Germany's Bundesbank cautioned the European Central Bank on Monday about the legal hurdles it would face in embarking on money printing to buy government bonds, underlining its opposition to such a move.

The remarks from Jens Weidmann, who also sits on the ECB's Governing Council, raise a further question mark over ECB President Mario Draghi's ability to deliver after Draghi threw the door open for further measures to bolster the euro zone.

Draghi's comments last week were interpreted by some as meaning that buying government bonds with new money, a policy known as quantitative easing, could come as soon as early 2015. But he faces stiff opposition from Germany.

This Reuters story, filed from Madrid, put in an appearance on their website at 11:42 a.m. EST yesterday---and I thank Manitoba reader U.M. for her first contribution to today's column.

Not jumping for joy: Ukraine, a year later

Just over a year ago, thousands of Ukrainians took to Kiev's main square, angry at oligarchs and corruption. But instead of “Europe” and prosperity, they got a coup, more oligarchy, and war.

During the three-month “people power” spectacle in Kiev's Independence Square (Maidan Nezalezhnosti) that began on November 21, 2013, one of the protesters' favorite chants was “Who doesn't jump is a Moskal” (a derogatory term for Russians). After three months of “jumping” - which involved attacking the police, attempting to storm government buildings, and cheering US and European officials who came to support them, the protesters overthrew the legally elected president and establish their own government on February 22, 2014. It has been nine months since then – and a whole year since the “Maidan” protests began; let's try to see what they've been “jumping” for.

Much like the 2004 “Orange Revolution,” the Maidan protest was an exercise in perception management. Officially, the reason the protesters gathered was the government's balking at signing the EU accession treaty. A TV, internet and social media campaign – the very name “EuroMaidan” was a Twitter hashtag coined by some clever PR professional – got the people riled up against the government presented as corrupt, incompetent and selfish.

Was this so? Part of the problem with the E.U. treaty was that it demanded Ukraine restructure its entire apparatus of state and society to the Union's standards, which would have cost something like $19 billion a year for the next decade (per The Telegraph). But Brussels was willing to offer a paltry $750 million (€610 million) in loans. Ukraine needed much more just to stay solvent. It was, by all metrics, a bad deal for Ukraine.

This very interesting op-edge was posted on the Russia Today website at 2:28 p.m. Moscow time on their Monday afternoon, which was 6:28 a.m. EST in New York.  I thank Roy Stephens for sending it---and it's definitely worth reading if you have the time or the interest, that is.

Summit of Failure: How the E.U. Lost Russia over Ukraine

One year ago, negotiations over a Ukraine association agreement with the European Union collapsed. The result has been a standoff with Russia and war in the Donbass. It was an historical failure, and one that German Chancellor Angela Merkel contributed to.

Only six meters separated German Chancellor Angela Merkel and Ukrainian President Viktor Yanukovych as they sat across from each other in the festively adorned knight's hall of the former Palace of the Grand Dukes of Lithuania. In truth, though, they were worlds apart.

Yanukovych had just spoken. In meandering sentences, he tried to explain why the European Union's Eastern Partnership Summit in Vilnius was more useful than it might have appeared at that moment, why it made sense to continue negotiating and how he would remain engaged in efforts towards a common future, just as he had previously been. "We need several billion euros in aid very quickly," Yanukovych said.

Then the chancellor wanted to have her say. Merkel peered into the circle of the 28 leaders of EU member states who had gathered in Vilnius that evening. What followed was a sentence dripping with disapproval and cool sarcasm aimed directly at the Ukrainian president. "I feel like I'm at a wedding where the groom has suddenly issued new, last minute stipulations."

The EU and Ukraine had spent years negotiating an association agreement. They had signed letters of intent, obtained agreement from cabinets and parliaments, completed countless diplomatic visits and exchanged objections. But in the end, on the evening of Nov. 28, 2014 in the old palace in Vilnius, it became clear that it had all been a wasted effort. It was an historical earthquake.

This long essay, which is also definitely worth reading, appeared on the German website spiegel.de at 7:00 p.m. Europe time yesterday evening---and it's also courtesy of Roy Stephens.

Suspension of Russian coal supplies to trigger electricity shortages in Ukraine — expert

Suspension of coal supplies from Russia will entail serious energy shortages in Ukraine, a Ukrainian expert said on Monday.

“It is a very dangerous signal: if we receive no coal from Russia we have little chance to find other sources to substitute for it,” Dmitry Marunich, a co-chairman of the Ukrainian Energy Strategies Fund, told the 112 Ukraine television channel. “We will simply have no time and money to sign coal contracts with other suppliers in other countries. We must not let it happen. It will trigger a serious shortage in electricity supplies and rotating power cuts will be inevitable.”

Earlier on Monday, Ukraine’s Minister of Energy and Coal Industry Yury Prodan confirmed reports that Russian companies had suspended exports of steam coal to Ukraine.

“According to information I have received from DTEK and Centrenergo, Russian companies have suspended coal export to Ukraine,” he told the Ukrainskaya Pravda newspaper. “I do not know why but I can say that the reasons are not economic. Both DTEK and Centrenergo pay for coal in due time.”

This very interesting news item, filed from Kiev, appeared on the itar.tass.com Internet site at 10:06 p.m. Moscow time on their Monday evening---and I thank Roy Stephens for sending it.

Russia fears ethnic cleansing in Ukraine amid rise of neo-Nazism – Putin

As Kiev continues to amass its forces in eastern Ukraine despite the ceasefire and use radical nationalist groups as armed battalions, Moscow is concerned about possible ethnic cleansing there, Russian President Vladimir Putin told ARD in an interview.

Speaking with Hubert Seipel of the German channel ARD ahead of the G20 summit, Putin warned of catastrophic consequences for Ukraine if the Kiev government continues to nurture radical nationalism and Russophobia, including in the ranks of its military and National Guard units that are still being sent as reinforcements to the country’s troubled east.

“Frankly speaking, we are very concerned about any possible ethnic cleansings and Ukraine ending up as a neo-Nazi state. What are we supposed to think if people are bearing swastikas on their sleeves? Or what about the SS emblems that we see on the helmets of some military units now fighting in eastern Ukraine? If it is a civilized state, where are the authorities looking? At least they could get rid of this uniform, they could make the nationalists remove these emblems,” Putin said.

This article showed up on the Russia Today website eight days ago---and it's also courtesy of reader M.A.

Russia-Europe: Sanctions Losing Steam

The foreign ministers of the European Union discussed the situation in Ukraine and their turbulent relations with Moscow agreeing that there is no point to enhance sanctions against Russia.

The meeting in Brussels came on the heels of G20 summit in Brisbane and was followed by German Foreign Minister visit to Moscow in a clear sign that all sides are not ready to prolong the standoff and strive to find the solution to the crisis in Ukraine.

Studio guest Ernest Sultanov, expert from MIR-initiative, an independent think-tank in Moscow, Dr. Hubertus Hoffmann, the Founder and President of World Security Network Foundation, Horvath Gabor, Foreign Editor of Népszabadság newspaper, Budapest, and Soren Liborious, Spokesman, Head of Press and Information Delegation of the European Union to Russia, shared their opinions with Radio Sputnik

No sanctions were imposed on Russia following the talks in Brussels. Don’t you have a feeling that Europe doesn’t have stomach for sanctions?

Ernest Sultanov: The sanctions are really bad for both sides. So, I don’t think they don’t have stomach to impose the sanctions, I think both sides have to find some other solutions to resolve the issues between them.

This interview was posted on the sputniknews.com Internet site at 12 o'clock noon Moscow time on Saturday---and I thank South African reader B.V. for finding it for us.

Christie’s Sells Serov’s Painting for Record $14.5 Million

The fine arts auctions house Christie's has sold Valentin Serov's painting Portrait of Maria Zetlin for $14,511 million during bidding in London, setting a record for a piece of Russian art sold at auction.

Serov's work was put up for auction by Israeli city Ramat Gan's administration. Christie's had initially estimated the painting's price at $2.3-$3.9 million.

"The Portrait of Maria Zetlin is without doubts, Serov's most unique work, which I had the honor of holding in my hands during a long history of my work at Christie's," International director of Christie's Russian Art Department Alexei Tizengauzen said ahead of the auction.

This interesting news story, filed from Moscow, showed up on their Internet site at 8:45 p.m. Moscow time yesterday evening local time---and I thank reader M.A. for finding it for us.

Sun sets on OPEC dominance in new era of lower oil prices

It wouldn’t be the first time that a meeting of the Organisation of Petroleum Exporting Countries (OPEC) has taken place in an atmosphere of deep division, bordering on outright hatred. In 1976, Saudi Arabia’s former oil minister Ahmed Zaki Yamani stormed out of the OPEC gathering early when other members of the cartel wouldn’t agree to the wishes of his new master, King Khaled.

The 166th meeting of the group in Vienna next week is looking like it could end in a similarly acrimonious fashion with Saudi Arabia and several other members at loggerheads over what to do about falling oil prices.

Whatever action OPEC agrees to take next week to halt the sharp decline in the value of crude, experts agree that one thing is clear: the world is entering into an era of lower oil prices that the group is almost powerless to change.

This new energy paradigm may result in oil trading at much lower levels than the $100 (£64) per barrel that consumers have grown used to paying over the last decade and reshape the entire global economy.

This article appeared on The Telegraph's website at 1 p.m. GMT on Saturday---and it's another contribution from reader B.V.

China ready to cut rates again on fears of deflation, sources tell Reuters

China's leadership and central bank are ready to cut interest rates again and also loosen lending restrictions, concerned that falling prices could trigger a surge in debt defaults, business failures and job losses, said sources involved in policy-making.

Friday's surprise cut in rates, the first in more than two years, reflects a change of course by Beijing and the central bank, which had persisted with modest stimulus measures before finally deciding last week that a bold monetary policy step was required to stabilize the world's second-largest economy.

Economic growth has slowed to 7.3 percent in the third quarter and policymakers feared it was on the verge of dipping below 7 percent - a rate not seen since the global financial crisis. Producer prices, charged at the factory gate, have been falling for almost three years, piling pressure on manufacturers, and consumer inflation is also weak. "Top leaders have changed their views," said a senior economist at a government think-tank involved in internal policy discussions.

This Reuters article, filed from Beijing, appeared on their Internet site at 10:49 p.m. EST on Sunday evening---and I found it posted on the gata.org Internet site.

China's ICBC to set up offshore yuan center in Los Angeles

China's Industrial and Commercial Bank (ICBC) signed a pact with the Los Angeles city government to promote cross-border yuan trade and set up an offshore renminbi center in California, the bank said on Saturday.

The move to create an offshore RMB center in the largest state in the United States would lay the foundations for greater yuan trade with China, ICBC said in a statement.

The agreement comes at a time when many other countries are ahead of the United States in establishing cross-border trade in yuan.

This Reuters piece, filed from Beijing, was posted on their website at 3:37 a.m. EST on Saturday morning---and reader 'David in California' was the first person through the door with it on Sunday.

Dr. Dave Janda interviews your humble scribe

Dave and I got together on Sunday afternoon over at all-talk radio WAAM-1600FM out of Ann Arbor, Michigan.  We spoke about the dire straits that the world economy is in---but most of it was about precious metals.

The audio interview posted on the davejanda.com Internet site---and it runs for about twenty-five minutes.

Senate report shows how easily banks can rig gold, copper, and other markets

The heavy involvement of investment banks in commodity trading creates the potential for market manipulation and conflicts of interest in the gold market, and exchange-traded gold funds may be mechanisms of market manipulation contrary to the basics of supply and demand, according to the 396-page report published last week by the Permanent Subcommittee on Investigations of the U.S. Senate's Committee on Homeland Security and Governmental Affairs.

GATA's friend J.H. points out these findings on Page 38 of the report:

"Possible conflicts of interest permeate virtually every type of commodity activity. If the bank's affiliate leases an electrical power plant, the bank may attempt to use regional pricing conventions to boost its profits, even at the expense of clients that pay the higher electricity costs. If the bank's affiliate mines coal while the bank trades coal swaps, the bank may ask its affiliate to store the coal rather than sell it to help restrict supplies, and benefit from long swap positions, while causing its counterparties to incur losses. If the bank's affiliate operates a commodity-based exchange-traded fund backed by gold, the bank may ask the affiliate to release some of the gold into the marketplace and lower gold prices, so that the bank can profit from a short position in gold futures or swaps, even if some clients hold long positions.

"A fourth problem with mixing banking and commerce is that, in the context of physical commodities, it invites market manipulation and excessive speculation in commodity prices. If a bank's affiliate owns or controls a metals warehouse, oil pipeline, a coal-shipping operation, refinery, grain elevator, or exchange-traded fund backed by physical commodities, the bank has the means to affect the marginal supply of a commodity and can use those means to benefit the bank's physical or financial commodities trading positions. If a bank's affiliate controls a power plant, the bank can 'manipulate the availability of energy for advantage' or to obtain higher profits."

This commentary, along with a link to the Senate report, is posted in this GATA release from Sunday.

Platinum and palladium shortages seen persisting

Platinum and palladium supply probably will fall short of demand for a fourth year in 2015 as more usage in vehicles helps compensate for rebounding South African mine output, according to Johnson Matthey Plc.

Platinum demand will outpace supply by 1.13 million ounces this year and palladium’s deficit will be 1.62 million ounces, according to a presentation of London-based Johnson Matthey’s platinum-group metals report. They would be the biggest shortfalls ever, based on data going back more than three decades for the metals.

A five-month mine strike that ended in June cut output from South Africa, the largest platinum producer and second-biggest for palladium. Supply shortages should continue next year partly as car demand strengthens in North America and China and stricter legislation requires more of the metals to be used in devices that curb harmful emissions.

“All things being equal, we would expect to see a good bounce back in South African supplies for both platinum and palladium,” Rupen Raithatha, research manager at Johnson Matthey, said by phone from Royston, England before the company presented the data today. “The auto side is going to be good.”

This Bloomberg article showed up on the mineweb.com Internet site yesterday---and it's courtesy of reader U.M.  Reader B.V. sent me the same story on this from the bulliondesk.com Internet site---and it's headlined "Platinum seen in record 1.33 million oz. deficit in ’14 – Johnson Matthey".

Gold market is manipulated, Grant Williams tells Lars Schall

Interviewed by the German financial journalist Lars Schall for Matterhorn Asset Management's Gold Switzerland, Singapore fund manager and "Things That Make You Go Hmmm..." letter editor Grant Williams says there's no doubt that the gold market is manipulated, that the only question is how much, and that because of central bank intervention there's not much left to free markets.

Schall and Williams cover other subjects, including the nature of money, the abuse of money creation and credit, the likelihood of returning to a gold standard, and the Swiss Gold Initiative. The interview is an hour long and can be heard at the goldswitzerland.com Internet site.

I thank Chris Powell for wordsmithing the above paragraphs of introduction---and I must admit that I haven't had the time to listen to it.

Goldcore: 122 Tonnes of Gold Secretly Repatriated to Netherlands

As the debate regarding whether or not Switzerland should keep the bulk of its gold reserves at home on Swiss soil reaches it's climax - the referendum takes place on Sunday - it is telling that the Dutch announced on Friday that they have just secretly repatriated 122 tonnes of their sovereign gold reserves from New York back to Amsterdam.

The repatriation movement has been driven by suspicion that the Federal Reserve and other central banks may have leased or sold gold it was holding on behalf of other countries to bullion banks and that this gold may have been used in order to suppress the price of gold in recent years.  Bizarrely, the Federal Reserve’s gold holdings have not been audited in over 50 years.

Questions are already being asked about how the Dutch were able to repatriate such a sizeable volume of gold when Germany's request was brushed aside. It may be that by taking a discreet approach the Dutch allowed the Federal Reserve room to manoeuvre - allowing them to harvest the metal from the open market. Skeptical analysts have suggested that the fall in the ETF gold holdings may have come in handy for the New York Federal Reserve.

Although the German Central Bank has stated that it trusts the Americans as custodians of it's gold reserves - despite being denied access to vaults in New York to view their own gold - the campaign for repatriation of Germany’s gold remains strong.

This must read commentary by Mark O'Byrne appeared on the goldcore.com Internet site on Monday.

Deutsche Bank's Modest Proposal to Central Banks: "Purchase the Gold Held by Private Households"

From Deutsche bank Behavioral Finance: Daily Metals Outlook

Although gold market operators are currently preoccupied with the prospect of the SNB finding itself obliged by referendum to buy large quantities of bullion, another central bank raised the same possibility yesterday: the ECB. As odd as it sounds, given the contentious internal debate this year over asset purchases in general, ECB board member, Yves Mersch, reminded journalists that the Bank could in theory buy any asset within a QE program. This could mean government debt, equities, ETFs, or even gold. Indeed, within an effective asset purchase program it matters not so much what the asset is, than who the seller is. Given that the eurozone banking system still appears to be a bottleneck in the monetary transmission mechanism, there might be some wisdom in bypassing it. Banks do not hold gold. However, this ‘theoretical’ possibility would quickly run into practical constraints, not least the volume limitations and the problem of having to pick winners and losers.

However, the idea of gold purchases has merit because of the possible sellers. Much gold is held in private households, especially in countries like Germany. In some cases these are unwanted remnants of crisis-driven investments five years ago. A program that targeted these holdings would liberate dormant liquidity, some of which might even flow into consumption.

This very interesting article appeared on the Zero Hedge website at 3:19 p.m. EST on Monday afternoon---and I thank reader 'David in California' for sending it our way.

Ukraine Central Bank Admits Gold Outflow, Calls It "Optimization of Reserve Structure"

A week after we reported that the head of the Ukraine central bank admitted in an unofficial, informal interview that Ukraine's gold is gone, all gone, moments ago the Central Bank revealed that, sure enough, the gold holdings in the civil war-torn country have tumbled, as a result of a decision in September to "increase the share of U.S. dollars in a reserve basket", or in other words, to sell the gold. Just don't call it that: in fact, as of today we have a brand new buzzword for gold liquidations: "optimization of international reserves."

From the central bank:  National Bank of Ukraine has optimized the structure of international reserves. This is due to timing structure of international reserves and the external position of the country. National Bank of Ukraine decided in September 2014 to increase the share of U.S. dollar in a reserve basket, because the structure of the trade balance of the country is 70.3% in US dollars, 15% in euros. 77.7% of gross foreign debt denominated in Ukraine USD in EUR - 11.2% in SDR - 5.8%.

Recently, there was a significant volatility in global currency markets associated with the strengthening of the US dollar against other world currencies. Therefore, the National Bank of Ukraine decided to reduce the share of gold in foreign exchange reserves to 8%. To this end, the international markets has sold 0.46 million. Troy ounces of gold in US dollars, respectively proportion of gold in international reserves declined to 7.9%.

It appears from this story the Ukraine's central bank that they didn't sell all their gold.  This news item put in an appearance on the Zero Hedge website at 10:16 a.m. EST on Monday morning---and reader M.A. was the first person through the door with it.

Swiss Gold "Fire and Smoke" - "Sermons On the Mount" and "Sorcerers Apprentices"

Central bankers reached a new low overnight when Swiss National Bank President Thomas Jordan warned of "disastrous consequences" from a pulpit in a church on a historic hill in the town of Uster, Switzerland.

“The initiative is dangerous because it would weaken the SNB,” he said yesterday regarding proposals to increase the Swiss gold reserves, at a memorial service in a church which Bloomberg dubbed the 'sermon on the hill.'

The separation of church and state was one of the great achievement of recent years. It looks like we need to see a proper separation of central banking from the state. States and sovereign nations should be in control of central banks, rather than the other way around.

Central bankers and their dogmatic Keynesian money printing creed would like to see themselves and their policies as infallible. Despite, such policies having an abysmal track record throughout history and indeed in recent years.

Banks are turning out to be like lawyers.  What won't they stoop to if they have to???  It reminds me of the joke about what the difference was between a lawyer and rat---and the answer was that "there are some things that rats just won't do." This Zero Hedge piece appeared on their website at 4:51 p.m. EST on Monday---and I thank reader Harry Grant for pointing it out.  It's worth reading.

The Swiss Referendum on Gold: What’s Missing From the Debate

The Swiss will vote on a referendum on November 30th that would ban the Swiss National Bank (SNB) from selling current and future gold reserves, repatriate foreign stored gold holdings to Switzerland, and mandate that gold must comprise a minimum of 20% of central bank assets. The SNB does not usually comment on political referendums. However, in this case it has done so quite vocally.

Why has the central bank decided to step into the political fray and oppose this initiative? What are its concerns? Are they valid or motivated by other factors?

The SNB’s primary objections to the gold initiative are three fold. 1) It claims that gold is “one of the most volatile and riskiest investments”, 2) that a 20% gold requirement will lower the “distributions to the confederation and the cantons” since gold does not pay interest like bonds and dividend paying stocks, and 3) that the 20% gold holding requirement will interfere with its ability to conduct monetary policy and complicate efforts to maintain “the minimum exchange rate”, the “temporary” policy of pegging the Swiss franc (CHF) to the Euro (EUR) it initiated in 2011 and continues to enforce to this day.

The first two concerns can quickly be addressed and discounted. Gold is indeed a volatile asset at times but so are bonds and equities. In recent years Greek, Spanish, Italian, Irish and other European bonds have been far more volatile than gold. The SMI, the Swiss stock index, lost over 50% of its value on two separate occasions between 2000 and 2009 while gold steadily rose at an annual rate of 8.50% over the same period.

This very thoughtful article was written by Eric Schreiber, independent asset manager, former head of commodities UBP, former head of precious metals Credit Suisse Zurich. All views expressed are his and may not reflect those of his former employers.   This falls into the absolute must read category---and appeared on the goldsilverworlds.com Internet site yesterday.

Indian firm procures multimillion-dollar gold export order

Rajesh Exports, the leading Indian gold exporter, announced that it has bagged a massive export order from UAE-based jeweler. The company has reportedly secured an export order worth Rs 1,350 crore from Al Sultan Jewellery, UAE. According to the deal, Rajesh Exports will supply designer range of gold and diamond studded jewelry and medallions.

The order is to be executed by end-February next year. According to the company, the execution of the order will contribute significantly to the bottom line of the company. The Bangalore facility will be responsible to meet the order in time. The company expressed confidence that it will be able to complete the order well within the time frame. Incidentally, the Banglaore manufacturing facility, with a built-up area of 500,000 square feet is the world’s largest jewelry manufacturing facility.

Earlier in July this year, the company had secured an export order worth Rs 1,260 crores of designer range of gold and diamond studded jewelry and medallions from Al Jameelat Jewellery, UAE. The company had successfully executed the order within the stipulated deadline of 30 September 2014.

This gold-related article showed up on the resourceinvestor.com Internet site sometime yesterday---and it's the final offering of the day from Manitoba reader U.M.

Koos Jansen: China's government and private gold reserves likely total 16,000 tonnes

China's government and private gold reserves likely total almost 16,000 tonnes, Bullion Star market analyst and GATA consultant Koos Jansen figures, calling attention to a Deutsche Bank report estimating that the People's Bank of China is accumulating gold at a rate of 500 tonnes per year.

Jansen's commentary is posted at the bullionstar.com Internet site yesterday---and I found it embedded in a GATA release.

¤ The Funnies









¤ The Wrap

At current prices, there is $6.6 trillion worth of gold in the world and a little over $16 billion worth of silver. In other words, on a dollar (or any other currency) basis, there is more than 400 times more gold in the world than silver. Expressed differently, all the silver in the world is worth only one-quarter of one percent (0.25%) of what all the world’s gold is worth. Even by doubling the amount of silver by including coins and small bars (most of which will never be converted into 1,000 oz bars), one would still end up with the gold being worth 200 times what the silver is worth or silver being worth 0.5% of what the gold is worth. These are the most extreme valuation differences ever.

Like investors in everything else, precious metals investors seek out the best relative value available. Investors everywhere want the best value, lowest risk and biggest bang for their buck. Due to an increasingly obvious price manipulation on the COMEX, silver has reached a degree of undervaluation relative to gold that is so extreme as to be almost unbelievable, even when expressed in simple arithmetic terms. And because gold is so cheap compared to other asset classes, that automatically means silver is even cheaper compared to every other asset. - Silver analyst Ted Butler: 22 November 2014

As I mentioned in my gold commentary at the top of the column, there wasn't much in the way of price activity now that we're in the throes of options and futures expiry.  The last day to be out of December is Thursday---and with that day being Thanksgiving in the U.S., I expect that the rest of the big volume will come today and tomorrow, as New York will be closed on that day, although I get the impression that the gold market may still be open.

Here are the 6-month charts for the six key commodities, plus natural gas.

As I said on Saturday, gold touched its 50-day moving average in Friday trading---and hasn't been anywhere near it since, as every rally attempt above the $1,200 spot price mark has been turned back.  If you carefully note the gold chart above, you'll see that we had what was most likely an engineered price failure at the 50-day moving average back in the third week of October---and I'm wondering out loud if we could be looking at a similar set-up right here.

Time will tell---and not too much time, either.

And as I write this paragraph, the London open is thirty minutes away.  There wasn't much activity in gold as far as price was concerned in Far East trading on their Tuesday, although it should be noted that both times gold broke through, or came close to the $1,200 spot price mark, there was a willing seller there to make sure that those rally attempts got no further---the last time coming at 3 p.m. Hong Kong time.  Gold's gross volume is 19,000 contracts at the moment, with about 30 percent of that amount consisting of roll-overs out of December and into the new front month, which is February.

Both spike rallies in silver, which occurred at the same time as gold's, met the same fate.  Silver's gross volume is 8,000 contracts, with almost half of that being roll-overs out of December and into March, the new front month once December goes off the board.

Platinum is up a few dollars---and the palladium price is flat.  The dollar index is chopping sideways in a very tight range.

As Ted Butler said on the phone yesterday, we're still 'locked and loaded' for a big up-move in the 'Big 6' commodities.  If this move is in the cards, only the 'when' is still unknown---as is how far JPMorgan et al will let prices run this time around.  If the central banks of the world are looking for inflation---commodity inflation is a sure-fire way of doing the job, as making up money out of thin air [QE] is now a spent force.

And as I send this out the door at 5:15 a.m. EST this morning, all four precious metals are jumping around a bit.  Another attempt by gold to rally above $1,200 spot got sold down immediately---as did the respective rallies in the the other three precious metals, but all are rallying anew as I hit the send button.  All four are above their respective closing prices in New York yesterday---and platinum is doing particularly well after its vicious sell-off in New York late Monday morning, as is silver at the moment.

Here's the Kitco silver chart as of 5:28 a.m. EST---and gross volume is now over 17,000 contracts.

Gross gold volume is 45,000 contracts, with 50 percent of that being roll-overs, so net volume isn't overly heavy.  Silver's gross volume is 16,000 contracts with 60 percent of that being roll-overs out of the December contract as well.  The dollar index isn't doing a lot---and is basically unchanged from yesterday's New York close.

I'm not expecting much in the way of fireworks for the remainder of the week, but with the supply/demand fundamentals in all four precious metals so far out of whack, you just never know.

That's all I have for today's column, which is more than enough---and I'll certainly be interested in what the charts show when I power up my computer later this morning.

See you tomorrow.

Ed Steer

]]>
Tue, 25 Nov 2014 06:22:00 +0000
<![CDATA[Financial Times’ Gillian Tett Notes Greenspan’s Renewed Endorsement of Gold]]> http://www.caseyresearch.com/gsd/edition/financial-times-gillian-tett-notes-greenspans-renewed-endorsement-of-gold/ http://www.caseyresearch.com/gsd/edition/financial-times-gillian-tett-notes-greenspans-renewed-endorsement-of-gold/#When:11:34:00Z "The HFT traders and their algorithms were active in both gold and silver"

¤ Yesterday In Gold & Silver

The gold price didn't do a lot until the London open---and things got a bit more interesting from point onward.  The activity that counted was the rally that began at 1 p.m. GMT in London, which got capped less than 20 minutes later---and minutes before the COMEX open---as gold headed above the $1,200 spot price mark with a vengeance and touched its 50-day moving average in the process.  Then the HFT boyz and their algorithms worked their magic at 11:40 a.m. EST---and within 15 minutes had the gold price down about $12.  From there it chopped quietly higher for the remainder of the the COMEX and electronic trading session, managing to close above the $1,200 spot price mark without further incident.

The low and high ticks were reported by the CME Group as $1,186.10 and $1,207.60 in the December contract.

Gold finished the Friday session at $1,202.10 spot, up $7.60 from Thursday's close.  Gross volume was way over 200,000 contracts once again, but netted out to only 155,000 contracts---which is still a huge amount.

It was more or less the same chart pattern in silver but, looking at the Kitco silver chart below, it was even more obvious that the price wanted to fly---and it took the usual judicious interference by the not-for-profit sellers to prevent that from happening.

The low and high ticks were recorded as $16.095 and $16.60 in the December contract---and intraday move of more than 3%.

Silver finished the day at $16.445 spot, up 19.5 cents from Thursday's close---and if left to its own devices, could just as easily have closed up $19.50---or more.  Gross volume was a hair under 100,000 contracts, but netted out at 46,000 contracts, which is still a chunky number.

Platinum traded pretty flat, but with a positive bias, until an hour before Zurich opened.  Then it rallied another $12 or so until it got sold down with the gold price starting just before lunch in New York---and after 1 p.m. EST, it traded ruler flat into the 5:15 p.m. close of electronic trading.  Platinum closed up $18 on the day.

The palladium chart was somewhat similar, but the rally that developed an hour before the Zurich open really had some legs until a thoughtful seller put an end to it all at 9 a.m. EST in New York.  It had another spike higher starting around 12:30 p.m.---but that got hammered flat starting at 1 p.m. in New York---and after 2 p.m. it traded flat before popping a few bucks right at the close.  Palladium closed up $22, but would have taken the $800 spot price out with ease if it had been allowed to do so.

The dollar index closed late on Thursday afternoon in New York at 87.70---and hit its 87.46 low tick around 10:30 a.m. Hong Kong time.  From there it struggled upward until minutes after the London open---and then blasted higher.  It hit its 88.37 high tick shortly after 1 p.m. in New York---and then gave up a handful of basis points going into the close, as the index finished the Friday session at 88.265---up 56 basis points from Thursday's close.

You should carefully note that the huge rally in the dollar index had no impact on what was happening in the precious metal market yesterday.

Here's the six-month US Dollar Index chart--and my previous comments that the dollar rally was very long in the tooth got blown out of the water by yesterday's action.

The gold stocks gapped up---and had some decent gains in the bag until the HFT boyz showed up in the gold market around 11:30 a.m. EST---and the HUI only finished up 0.78%.  It was was up 3% at one point.

With some obvious variations, the silver equities followed a similar path---and Nick Laird's Intraday Silver Sentiment Indicator closed up 1.04%.

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

The CME Preliminary Report for the Friday trading session showed that gold's November open interest dropped by 8 contracts---and is now down to 20 contracts---minus the 4 contracts mentioned in the prior paragraph, of course.  Silver's November o.i. continues to sit there unchanged at 88 contracts.

There were no reported changes in GLD yesterday---and as of 8:33 p.m. EST yesterday evening, there were no reported changes in SLV, either.

There was a tiny sales report from the US Mint.  They sold 34,000 silver eagles---and that was all.

Month to date, the Mint has sold 49,000 troy ounces of gold eagles---11,000 one-ounce 24K gold buffaloes---and 2,669,500 silver eagles.

Over at the Comex-approved depositories on Thursday, there was no gold reported received, but a very large withdrawal of 163,324 troy ounces was made out of the Scotiabank depository---and the link to that activity is here.

In silver, there were 50,000 troy ounces deposited---and 111,580 troy ounces reported shipped out.  All of the activity was at Brink's, Inc.---and the link that action is here.

Even though I had no preconceived opinion of what might be in yesterday's Commitment of Traders Report, I was still somewhat disappointed by what the report showed.

In silver, the headline number showed that the Commercial net short position increased by 755 contracts, or 3.8 million ounces, which wasn't a lot.  The Commercial net short position now stands at 90.9 million troy ounces.  In the Managed Money category of the Disaggregated COT Report, another 2,388 short contracts (Ted Butler's 'rocket fuel' for the next rally in silver) were covered at enormous profits.  Ted says that the raptors (the Commercial traders other than the Big 8) sold about 2,600 long contracts---contracts that can't be sold to suppress the price on the next big rally, so that's a positive.

Once again the Big 8 traders on the short side used the opportunity to cover as many short positions that they could.  Ted says that they covered about 1,800 contracts worth---1,000 by JPMorgan and the balance in the '5 through 8' category.  Ted also said that JPMorgan's short position appears to be something under 7,000 contracts.  He also added that it's entirely possible that JPMorgan is no longer in the Big 4 category---and could be in the '5 through 8' category by now.

In this COT Report, the 'Big 4' are net short 32,018 COMEX silver contracts.  In the November Bank Participation Report, there were '11 or more' non-US banks that were net short 19,225 COMEX silver contracts---and I estimated that at a minimum, Canada's Scotiabank held 17,000 of those contract all by themselves.  This made Scotiabank the 'King Silver Short' on the COMEX by a country mile---and the only bank left in the 'Big 8' category other than JPMorgan.  JPMorgan is the only silver short in the '3 or less' US banks that held COMEX silver contracts in the November Bank Participation Report, as the remaining two banks [or perhaps only one bank] in that category are [is] net long.

Since the remaining six traders in the 'Big 8' category aren't banks, US or foreign, then that leaves the investment houses, plus maybe the BIS and the US Exchange Stabilization Fund, as the only candidates left that hold title to these six spots.  I'd bet $10 that one of them might be Morgan Stanley---but as for the others, I haven't a clue.

In gold, the Commercial net short position increased by a very chunky 20,973 contracts, or 2.10 million troy ounces.  The Commercial net short position in gold now stands at 7.10 million troy ounces.  Ted says that the traders in the 'Big 8' category went short 8,000 contracts during the reporting week---and that it appeared that JPMorgan decreased their long-side corner in the COMEX gold market by 3,000 contracts---and is now down to around 18,000 contracts.

Under the hood in the Disaggregated COT Report, it was mostly the Managed Money on the other side of the Commercial traders, as they went long to the tune of 9,088 contracts---and covered an additional 8,697 short contracts.

Most of the activity contained in this COT Report in both metals is centered around the Friday, November 14 trading day, as little happened on any of the other days during the reporting week.

Here's Nick's "Days of World Production to Cover COMEX Short Positions" chart for all physical commodities traded there and, with the exception of the semipermanent position of cocoa, all four precious metals remain pinned to the far right-hand side of this chart, as they have been for the last 15 years.

My back-of-the-envelope calculation shows that Scotiabank and JPMorgan combined are short about 55 days of world silver production---almost half of the 115 days of world silver production that the 'Big 8' are short in Friday's COT Report, which is the green bar on the far-right side of the above chart.  That leaves the six remaining traders in the 'Big 8' category short the remaining 60 days between them.

Well, the Shanghai Gold Exchange posted their activity for the week ending on Friday, November 14---and they showed a 52.260 tonne withdrawal.  Here's Nick's most excellent chart showing the change.

Since it's the weekend, I always look forward to emptying out my inbox and letting you pick through them.

¤ Critical Reads

Sell, Sell, Sell---The Central Bank Madmen Are Raging

The global financial system has come unglued. Everywhere the real world evidence points to cooling growth, faltering investment, slowing trade, vast excess industrial capacity, peak private debt, public fiscal exhaustion, currency wars, intensified politico-military conflict and an unprecedented disconnect between debt-saturated real economies and irrationally exuberant financial markets.

Yet overnight two central banks promised what amounts to more monetary heroin and, presto, the S&P 500 index jerked up to 2070. That is, the robo-traders inflated the PE multiple for S&P’s basket of US-based global companies to a nosebleed 20X their reported LTM earnings.

And those earnings surely embody a high water mark in a world where Japan is going down for the count, China’s house of cards is truly collapsing, Europe is plunging into a triple dip, and Wall Street’s spurious claim that 3% “escape velocity” has finally arrived in the US is soon to be discredited for the 5th year running. So it goes without saying that if “price discovery” actually existed in the Wall Street casino, the capitalization rate on these blatantly engineered earnings (i.e., inflated EPS owing to massive buybacks) would be decidedly less exuberant.

In truth, nothing has changed about the precarious state of the world since yesterday. Except… except the Great Bloviator at the ECB made another fatuous and undeliverable promise—this time that he would do whatever he “must to raise inflation and inflation expectations as fast as possible”; and, at nearly the same hour, the desperate comrades in Beijing administered another sharp poke in the eye to China’s savers by lowering the deposit rate to by 25 bps to 2.75%.

David Stockman goes supernova in this article that appeared on his website yesterday sometime---and today's first offering is courtesy of Roy Stephens.

Jim Rickards: Why a US Rate Hike in 2015 Is Unlikely

Jim Rickards, chief global atrategist at West Shore Funds, says the US economy is still seeing below-trend growth and remains too weak to support an interest rate increase. Jim is also on record as saying that interest rates will never rise again.

This 3:32-minute CNBC video clip was posted on their Web site at 9:20 p.m. EST on Thursday evening---and it's courtesy of Harold Jacobsen.

Doug Noland: Memories - of 2012 and 2007

At the “Core of the Core,” historic market euphoria has pushed excess in U.S. equities and corporate Credit to precarious extremes (relative to rapidly deteriorating global financial and economic fundamentals). Concerted global central bank stimulus measures have exacerbated the divergence between inflated securities prices and deflating prospects for global growth and profits. Worse yet, the redistribution of wealth that accompanies the policy-induced inflation of the “Global Financial Sphere” is worsening already alarming geopolitical tensions. Global central banking and “risk free” government debt are at risk of being discredited.

Why would I contemplate that central bank measures might be losing ability to keep the global Bubble afloat? Over recent weeks we’ve seen the concerted efforts of team Yellen, Draghi, Kuroda and the PBOC have minimal impact on the fragile “Periphery.” Even Friday, on the back of Draghi and the Chinese, crude oil gave back much of an earlier 2.6% gain to close the week up only 69 cents. The Goldman Sachs Commodities index was only slightly positive for the week near multi-year lows. Curiously, Italian CDS increased added a basis point this week. Greek CDS traded to a 13-month high Thursday. Eastern European currencies traded down again this week. Data out of Europe has been just dreadful. Ukraine looks dangerous.

The Mexican peso declined 60 bps this week, trading at the lowest level versus the dollar since the summer of 2012. Mexico succumbing to EM contagion would be a major development. Meanwhile, here at the Bubble’s “Core,” this week saw the S&P Homebuilding Index jump 3.9% and the Morgan Stanley Retail Index rise 2.1% (to a record high). Yet there were a few interesting Bloomberg headlines: “Riskiest Junk Borrowers Imperiled as Yields Jump…;” “Munis Facing First Losses of 2014 as Record Win Streak Imperiled;” “Corporate Bond Spread Versus Treasuries Widens to Most in 2014;” “Bond Record in Sight as Sales Near $4 Trillion.” Now that’s something to ponder: A record $4.0 TN of international corporate bond issuance in the face of a faltering global Bubble. Like many things these days, it brings back (bad) memories of 2007.

Doug's Credit Bubble Bulletin was posted on the prudentbear.com Internet site late on Friday evening---and it's always a must read. I found this item on my own before reader U.D. could send it to me.

Widespread Flooding Ahead for Snowy Western New York: Officials

Warm temperatures and rain were forecast for the weekend in the city of Buffalo and western New York, bringing the threat of widespread flooding to the region bound for days by deep snow.

Areas where several feet of snow fell this week should brace for significant, widespread flooding, the National Weather Service warned on Friday.

Swept by lake effect storms, parts of western New York including Buffalo, received as much as seven feet (2 meters) of snow, an amount equal to a year's worth of accumulation for the region. Such storms occur when cold air moves across warmer Great Lake waters and can dump heavy snowfall when they hit land.

This Reuters article appeared on their Web site at 12:19 p.m. EST on Friday---and it's the second offering of the day from Roy Stephens.

Bank of England Probes Whether Staff Helped Rig Money Auctions

The Bank of England has opened a formal investigation into whether its officials knew of -- and even facilitated -- the possible manipulation of auctions designed to inject money into the credit markets to alleviate the financial crisis.

The probe, which started in the summer, has been revealed just a week after the U.K. central bank published a report that criticised its own response to the foreign exchange rigging scandal.

The rest of this Financial Times story is subscriber protected---and I found it in a GATA release yesterday.

The Siege of Julian Assange Is a Farce

The siege of Knightsbridge is a farce. For two years, an exaggerated, costly police presence around the Ecuadorean embassy in London has served no purpose other than to flaunt the power of the state. Their quarry is an Australian charged with no crime, a refugee from gross injustice whose only security is the room given him by a brave South American country. His true crime is to have initiated a wave of truth-telling in an era of lies, cynicism and war.

The persecution of Julian Assange must end. Even the British government clearly believes it must end. On October 28, the deputy foreign minister, Hugo Swire, told Parliament he would "actively welcome" the Swedish prosecutor in London and "we would do absolutely everything to facilitate that". The tone was impatient.

The Swedish prosecutor, Marianne Ny, has refused to come to London to question Assange about allegations of sexual misconduct in Stockholm in 2010 - even though Swedish law allows for it and the procedure is routine for Sweden and the U.K. The documentary evidence of a threat to Assange's life and freedom from the United States - should he leave the embassy - is overwhelming. On May 14 this year, U.S. court files revealed that a "multi subject investigation" against Assange was "active and ongoing".

This essay by John Pilger was posted on the Asia Times Web site on Monday---and I thank UK reader Tariq Khan for sending it.  For obvious reasons, it had to wait for today's column.

Dutch Had Euro-Exit Plan at Height of Crisis

Details have emerged indicating that both the Dutch and German governments were preparing emergency plans for a return to their national currencies at the height of the euro crisis.

In early 2012, a few months after the then Greek prime minister Georgios Papandreou and his Italian counterpart Silvio Berlusconi had resigned, the Dutch finance ministry prepared for a scenario in which the Netherlands could return to its former currency.

Dutch TV documentary programme Argos Medialogica reported on Tuesday (18 November), based on anonymous sources, that the ministry had an emergency plan called Florijn, a reference the original name of the guilder, the Netherlands' pre-euro coin.

Current finance minister Jeroen Dijsselbloem also confirmed the existence of the plan on Tuesday in his weekly interview with RTLZ.

This very interesting article was posted on the euobserver.com Internet site at 9:53 a.m. Europe time on their Friday morning---and it's another offering from Roy Stephens.

Draghi Throws ECB Door Open to Money Printing as Global Prospects Dim

European Central Bank President Mario Draghi threw the door wide open on Friday for more drastic measures to prevent the euro zone from sliding into deflation, promising to use whatever means necessary as China also acted to boost its sagging economic growth.

With many fearing the euro zone could be heading for a Japanese-style lost decade of deflation and recession, Draghi's remarks were reminiscent of when he pulled the bloc back from possible disintegration in 2012 by promising to do "whatever it takes" to back the common currency.

Painting a bleak picture of the state of the 18 countries in the euro bloc, Draghi stressed that "excessively low" inflation had to be raised quickly.

In a blunt message, he said there was now no sign of improvement in the months ahead and the ECB would pump more money into the euro bloc if its current measures fell short.

This Reuters piece, filed from Frankfurt at 2:35 p.m. EST yesterday, is courtesy of West Virginia reader Elliot Simon---and it's definitely worth reading.

Poroshenko Gets Booed During Wreath-Laying at ‘Heavenly Hundred’ Memorial

On Friday activists booed Ukraine’s President Petro Poroshenko as he attended a wreath-laying ceremony at the ‘heavenly hundred’ memorial erected on Institutskaya Street in Kiev.

This Friday Ukraine celebrates the one-year anniversary of the beginning of the pro-Eurointegration protests last year that culminated in a putsch which ousted President Viktor Yanukovich. The people killed during the protests on Institutskaya Street were nicknamed “the heavenly hundred.” US Vice President Joe Biden, who is in Kiev to discuss offering assistance to Ukraine, was slated to participate in the ceremony but changed plans at the last minute. Biden is only the last in a series of US officials who went out of their way to show support for the protesters and the regime that they subsequently installed.

“Shame [on you]!”, “You’re awarding our heroes posthumously!” chanted the crowd that assembled on Friday, which included some of the relatives of the dead. One of the activists pointed out that those wounded during the February clashes at Maidan Square didn’t receive the special status that would’ve provided them with free access to the social and medical assistance they require.

Poroshenko made an attempt to calm the crowd but failed, and was forced to leave the ceremony amid the angry shouting.

This news item, filed from Moscow, appeared on the sputniknews.com Internet site at 3:31 p.m. Moscow time yesterday afternoon---with was 7:31 a.m. EST.  I thank Roy Stephens for sending it.  The france24.com Internet site carried a similar story on Friday.  It was headlined "Ukraine’s Poroshenko heckled at anniversary of Kiev protest"---and it's courtesy of South African reader B.V.

US Congress to Pressure for Lethal Military Aid to Ukraine: Senator McCain

The newly elected U.S. Congress will pass resolutions and apply pressure to U.S. President Barack Obama to provide Ukraine with lethal military assistance, U.S. Senator John McCain told Sputnik news in a Friday interview.

"We [Congress] will be talking a lot about it. We will pass resolutions. We will put every amount of pressure we can on this recalcitrant administration," McCain said when asked about the Obama administration's ongoing refusal to provide lethal military aid to the government in Kiev.

The Senator, who is expected to assume the chairmanship of the Senate Armed Services Committee in 2015, does not know whether the efforts by Congress will be successful.

Whether the issue creates a major clash between the executive and legislative branches of the US government will "depend on whether they [the Obama administration] will see reality or not," McCain said.

This story, filed from Washington, was posted on the sputniknews.com Internet site at 7:31 p.m. EST on Friday evening---and it's another offering from Roy Stephens.

Russia Warns US Against Supplying ‘Lethal Defensive Aid’ to Ukraine

Moscow has warned Washington a potential policy shift from supplying Kiev with “non-lethal aid” to “defensive lethal weapons”, mulled as US Vice President visits Ukraine, would be a direct violation of all international agreements.

A Russian Foreign Ministry spokesperson said that reports of possible deliveries of American “defensive weapons” to Ukraine would be viewed by Russia as a “very serious signal.”

“We heard repeated confirmations from the [US] administration, that it only supplies non-lethal aid to Ukraine. If there is a change of this policy, then we are talking about a serious destabilizing factor which could seriously affect the balance of power in the region,” Russian Foreign Ministry spokesman Aleksandr Lukashevich cautioned.

This news item was posted on the Russia Today Internet site at three minutes after midnight on Friday morning in Moscow---and I thank reader M.A. for his first contribution of the day.

John Batchelor Interviews Stephen F. Cohen on the Crisis in Ukraine

Few people in the world are more qualified to speak about the Ukraine and Russia than Stephen F. Cohen, NYU and Princeton professor Emeritus.

This 39:45-minute audio interview was posted on the johnbatchelorshow.com Internet site on Tuesday---and for length and content reasons, had to wait for today's column.  I thank Larry Galearis for bringing it to our attention.  It's worth your while if you have the time---and interest.

Russia Signs Deal with Ukraine to Deliver Nuclear Fuel for 2015: Rosatom

Russia has signed a contract with Ukraine to deliver nuclear fuel for the country's nuclear energy plants in 2015, the head of Russian nuclear agency Rosatom said Friday.

"A contract for 2015 has been signed to deliver fuel for Ukraine's nuclear energy facilities," Sergei Kirienko said in a speech before a student assembly in Moscow.

The head of the Russian nuclear agency stressed that supplies of nuclear fuel to Ukraine had not been held up even once and shipments have been delivered to Ukraine as scheduled.

In September, Ukraine gave the green light to its nuclear power plants to receive supplies of upgraded nuclear fuel from the U.S. company Westinghouse, a move criticized by Rosatom as a political one.

Well, I sure hope the Russian company is getting paid up front for this, as I wouldn't want to extend a nickel's worth of credit to Ukraine right now.  This article appeared on the sputniknews.com Web site at 2:24 p.m. Moscow time on their Friday afternoon, which was 6:24 a.m. EST.  It's courtesy of reader M.A., for which I thank him.

Pepe Escobar: Washington Plays Russian Roulette

These are bleak times. I've been in serious conversation with some deep sources and interlocutors - those who know but don't need to show off, privileging discretion. They are all deeply worried. This is what one of them, a New York strategic planner, sent me:

The propaganda attack against Putin equating him with Hitler is so extreme that you have to think that the Russians cannot believe their ears and cannot trust the United States anymore under any circumstances.

I cannot believe how we could have gotten ourselves into this situation to protect the looters in the Ukraine that Putin would have rid the Ukraine of, and even had the gall to place in a leadership role one of the worst of the thieves. But that is history. What is certain is that MAD [mutually assured destruction] is not a deterrent today when both sides believe the other will use nuclear weapons once they have the advantage and that the side that gains a decisive advantage will use them. MAD is now over.

That may sound somewhat extreme - but it's a perfectly logical extension, further on down the road, of what the Russian president intimated in his already legendary interview with Germany's ARD in Vladivostok last week: the West is provoking Russia into a new Cold War.

This absolute must-read commentary by Pepe was posted on the Asia Times Web site yesterday sometime---and the first person through the door with this essay was reader M.A.

Serbia Won’t Join Anti-Russian Sanctions Club Despite EU Pressure - Nikolic

Serbia is not planning to impose sanctions on Russia, said its President Tomislav Nikolic after meeting E.U. Commissioner Johannes Hahn. The latter said the EU expects Serbia to bring its policy in line with the European one if it seeks to enter the union.

Nikolic said that Serbia is not planning to introduce sanctions at the moment, though admitting the country is seeking E.U. membership which implies an obligation to pursue common policies, including foreign.

"What I heard from Hahn is the same what you have heard from him: Serbia is not an E.U. member and it can be independent in pursuing its foreign policy; but E.U. membership would have implied a commitment to pursue a common foreign policy," the President said at a media conference after talks with Hahn, E.U. Commissioner for Enlargement and Good-Neighbourly Relations visiting Belgrade on Thursday.

This is a follow-up story to the one I posted about this subject in yesterday's column.  It appeared on the Russia Today Web site at 7:40 p.m. Thursday evening Moscow time---and I thank reader M.A. for digging it up for us.

In a Shift, Obama Extends US Role in Afghan Combat

President Obama decided in recent weeks to authorize a more expansive mission for the military in Afghanistan in 2015 than originally planned, a move that ensures American troops will have a direct role in fighting in the war-ravaged country for at least another year.

Mr. Obama’s order allows American forces to carry out missions against the Taliban and other militant groups threatening American troops or the Afghan government, a broader mission than the president described to the public earlier this year, according to several administration, military and congressional officials with knowledge of the decision. The new authorization also allows American jets, bombers and drones to support Afghan troops on combat missions.

In an announcement in the White House Rose Garden in May, Mr. Obama said that the American military would have no combat role in Afghanistan next year, and that the missions for the 9,800 troops remaining in the country would be limited to training Afghan forces and to hunting the “remnants of Al Qaeda.”

The decision to change that mission was the result of a lengthy and heated debate that laid bare the tension inside the Obama administration between two often-competing imperatives: the promise Mr. Obama made to end the war in Afghanistan, versus the demands of the Pentagon that American troops be able to successfully fulfill their remaining missions in the country.

Since this story appeared on the New York Times Web site, I'm not sure how much of this is real---and how much is made up---so if you decide to read it, do so with an open mind.  I thank Roy Stephens for sending it to me late yesterday evening.

Russia and China: Akin to Porcupines Mating

That was how the slow and careful rapprochement between Russia and China has been described by Eric Margolis, one of my favorite geopolitical writers.

US shenanigans in Eastern Europe and the East China Sea—fomenting so-called colored revolutions in Ukraine and Georgia (both on Russia’s periphery) and egging on China’s neighbors to make aggressive territorial claims—have pushed the Russian bear and Chinese dragon together. In May, the two uneasy neighbors reached a de facto alliance represented by a 20-year, $400 billion deal for Russia to supply China with natural gas.

A Russia/China alliance shifts the Earth’s geopolitical axis. Historians may look back at the energy deal as the moment the post-Cold War era and the US’s singular position came to an end. The Russia/China team is now a consequential economic and military counterweight to the US. It will operate as an attractant for every country and every faction that for any reason resents the US’s giant footprint in world affairs.

This short, but worthwhile commentary appeared on the International Man Web site the other day.

Futures Soar on Surprise Chinese Rate Cut

Moments ago, as traditionally is the case, the Chinese central bank caught the world by surprise and cut rates, notably the deposit rate by 25 bps and the lending rate by 40 while allowing banks to offer interest of 1.2 times the benchmark rate.

This happens as many analysts had been calling for more easing from China for months to help stabilize the faltering economy, but also happens a day after as Bloomberg reported, "Distressed Debt in China? Ain’t Seen Nothing, DAC Says." Basically well over a year after promising deleveraging reforms and a lower trend line growth rate, one which would not see incremental monetary stimulus, Xi Jinping threw in the towel and joined Japan and Europe in aggressively pursuing greener pastures.

It also means that, as expected, China is now clearly paying attention to Japan's unprecedented currency destruction and as Albert Edwards noted a few weeks ago, now that China has finally broken the seal, it is only a matter of time before China also devalues its currency outright.

This Zero Hedge article from early Friday morning EST is definitely worth your while---and I thank reader M.A. for his final contribution to today's column.

China Building South China Sea Island Big Enough for Airstrip: Report

Satellite images show China is building an island on a reef in the disputed Spratly Islands large enough to accommodate what could be its first offshore airstrip in the South China Sea, a leading defense publication said on Friday.

The construction has stoked concern that China may be converting disputed territory in the mineral-rich archipelago into military installations, adding to tensions waters also claimed by Taiwan, Malaysia, the Philippines, Vietnam and Brunei.

IHS Jane's said images it had obtained showed the Chinese-built island on the Fiery Cross Reef to be at least 3,000 meters (1.9 miles) long and 200-300 meters (660-980 ft) wide, which it noted is "large enough to construct a runway and apron."

The building work flies in the face of U.S. calls for a freeze in provocative activity in the South China Sea, one of Asia's biggest security issues. Concern is growing about an escalation in disputes even as claimants work to establish a code of conduct to resolve them.

This Reuters article, filed from Washington, showed up on their Web site at 3:20 p.m. EST on Friday---and it's the final contribution of the day from Roy Stephens---and I thank him on your behalf.

The Fall of the Roman Republic

In 133 B.C., Rome was a democracy.  Little more than a hundred years later it was governed by an emperor. This imperial system has become, for us, a by-word for autocracy and the arbitrary exercise of power.

At the end of the second century B.C. the Roman people was sovereign. True, rich aristocrats dominated politics. In order to become one of the annually elected 'magistrates' (who in Rome were concerned with all aspects of government, not merely the law) a man had to be very rich.

Even the system of voting was weighted to give more influence to the votes of the wealthy. Yet ultimate power lay with the Roman people. Mass assemblies elected the magistrates, made the laws and took major state decisions. Rome prided itself on being a 'free republic' and centuries later was the political model for the founding fathers of the United States.

By 14 A.D., when the first emperor Augustus died, popular elections had all but disappeared. Power was located not in the old republican assembly place of the forum, but in the imperial palace. The assumption was that Augustus's heirs would inherit his rule over the Roman world - and so they did.

This was nothing short of a revolution, brought about through a century of constant civil strife, and sometimes open warfare. This ended when Augustus - 'Octavian' as he was then called - finally defeated his last remaining rivals Mark Antony and Cleopatra in 31 B.C. and established himself on the throne. Why did this revolution happen?

This very interesting history lesson from 2,000 years ago when laid over what's happening in the U.S., is pretty stark.  It's posted on the bbc.co.uk Internet site---and I lifted it from yesterday's edition of the King Report.  Another history lesson for the same period is also one that I also borrowed from yesterday's King Report and it's linked here.  In some respects, it's a better story than the one I've posted above.

'Immoral but Not Illegal': Metal Warehousing Games in the Spotlight

Complex deals employed by Goldman Sachs' metals storage unit to build vast stockpiles and then maintain queues test the spirit of the London Metal Exchange operating code, shocking many traders and confirming others' suspicions.

But the intricate transactions that saw Metro International Trade Services shell out millions of dollars to customers to join exit queues to bolster rental income was within the rules, according to two senior warehousing executives and two veteran traders.

An explosive U.S. Senate report released on Wednesday revealed the "imaginative" methods used to lure millions of tons of aluminum into Detroit, Metro's headquarters, and then keep it there over the past four years.

You know that if either G.S. or JPM is involved, it's "immoral, but not illegal"---and in some cases its both.  The disturbing must-read article appeared on the Reuters Web site at 4:23 a.m. EST on Friday morning---and I found it on the gata.org Internet site.

Citing Risks, Fed May Limit Wall Street Role in Commodities

The Federal Reserve may curtail Wall Street commodity businesses after lawmakers said banks' role in energy, power, and metals markets spurred unfair trading advantages and could threaten financial stability.

At a Senate hearing today, Fed Governor Daniel Tarullo said curbs under consideration include ownership limits, restricting how much revenue can be derived from commodities, and requiring Wall Street firms to boost capital. He said the new rules, to be proposed early next year, could restrict banks from investing in oil tankers, coal mines, and other businesses involved in physical commodities.

"We are focusing on the risk to safety and soundness presented by specific activities and on whether those risks can be appropriately and adequately mitigated," Tarullo said at the hearing held by the Senate Permanent Subcommittee on Investigations.

This Bloomberg news item, filed from Washington, was posted on their Web site at 10:40 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.

Sprott Money Weekly Wrap-Up with Eric Sprott

Eric talks about the Surge in Asian Investment Gold Demand, the Positive Movement in Physical Gold Demand Around the World, and the Possible Impact of the Swiss Referendum on the Physical Gold Market.

This 9:32-minute audio interview conducted by Jeff Rutherford was posted on the sprottmoney.com Internet site on Friday.

Financial Times' Gillian Tett Notes Greenspan's Renewed Endorsement of Gold

A decade ago, when Alan Greenspan was chairman of the mighty Federal Reserve, he was infamous for delivering ambiguous, Delphic speeches that nobody could understand. No longer. I recently had a chance to interview Greenspan, 88, at the Council on Foreign Relations, regarding an updated version of his latest book.

These days the retired Greenspan speaks so clearly that some of his words are still ricocheting around the blogosphere. For what he revealed on the CFR platform was that he harbours considerable doubts about whether recent Western monetary policy experiments have actually helped economic growth. He also fears that such experiments have been so wild that it will be very hard to exit from these policies in the future -- in the U.S. or anywhere else -- without sparking huge market volatility.

Indeed, Greenspan is so worried about future turbulence that he apparently sympathises with investors (and central banks) who are stocking up on gold.

Unfortunately, unless you're plugged into the Financial Times website, which is free if you only read a couple of articles a month, the balance of this story is subscriber protected.  There's nothing new in here, of course, as what Greenspan said at the Council on Foreign Relations is already well known---and I certainly covered it in this column.  What is interesting is that Gillian Tett, who is as Establishment as you can get, wrote this in the Financial Times of London on Friday.  So, from that perspective, it's a big deal---and wouldn't have shown up there without the approval of the senior editor.  This is another gold-related news item that I found at the gata.org Web site yesterday---and the actual FT headline reads "Gold: Worth Its Weight?"

Ronan Manly: Swiss Gold Vote Likely Tighter Than Polls Suggest

GoldCore analyst and GATA consultant Ronan Manly provides a detailed analysis of the opinion polls that seem to be moving against the Swiss Gold Initiative, and he raises a compelling question: While the Swiss National Bank complains that the initiative would severely limit its monetary policy options, the initiative gives the bank five years for compliance, so just how long does the bank intend to chain the Swiss franc to a depreciating euro?

Manly's commentary is headlined "Swiss Gold Vote Likely Tighter than Polls Suggest"---and it's posted at the goldcore.com Internet site.  It's on the longish side, dear reader, but definitely worth reading if you have the time---and/or the interest.  I thank Chris Powell for wordsmithing "all of the above."

Sprott's Thoughts: Paul Wilson, CEO, World Platinum Investment Council

Paul Wilson recently took up the role of Chief Executive Officer at the newly created World Platinum Investment Council (WPIC). The Council was launched by a group of six platinum producers in South Africa, in order to further develop the global market for platinum investment.

Readers may know that our affiliate Sprott Asset Management LP manages one of the largest above-ground stockpiles of platinum in the world, in the form of the Sprott Platinum and Palladium Trust (NYSE: SPPP).

What will the World Platinum Investment Council do? Their CEO Paul Wilson was kind enough to call me up and tell me what it’s all about.

This very interesting 'interview' appeared on the sprottglobal.com Internet site yesterday---and it was  'conducted' by Henry Bonner.  Of course the obvious reason that platinum prices are not rising is because its price is being managed like the other three precious metals.  I read this commentary---and that crucial fact is nowhere to be found.  Either the question was never asked, or the information wasn't volunteered.  How typical.

MMTC-PAMP India Awaiting Government Nod for Gold Metal Scheme

In a move which will it hopes will in some way help resolve India’s 'insatiable appetite’ for gold and the attendant problems with the high current account deficit (CAD), MMTC-PAMP, a 27:73 per cent joint venture between India’s largest bullion importer MMTC and Swiss PAMP SA, is ready with its gold metal account scheme to mobilize gold from small consumers who account for a bulk of gold demand.

The minimum deposit will be around 50 grams of gold and that will address more than 90 per cent of gold consumers in India, Rajesh Khosla, managing director, MMTC-PAMP India told this correspondent.

The scheme would help small retail gold consumers, deposit their gold, melt it and earn interest on it and accrue gold instead of rupees in the account at the time of maturity. On the implementation of the scheme, Mr. Khosla said the Reserve Bank of India (RBI) would submit its views in early December after which the government would take a call on the scheme.

Well, 'scheme' is the operative word in this story---as Manitoba reader U.M. carefully pointed out when she sent me this article yesterday.  Filed from Mumbai, it was posted on thehindu.com Internet site at 7:53 p.m. IST on their Friday evening.

Indian Central Bank Cautious on Response to Gold Import Surge

The Reserve Bank of India, grappling with a surge in gold imports last month, could support some restrictions for trading houses but two senior policymakers involved in the bank's decision-making said officials were also wary of overreacting. 

A senior finance ministry source told Reuters on Tuesday the country would soon announce measures set to center on import restrictions for private trading house that were eased earlier this year. Private jewellery exporters account for the bulk of demand for gold.

But the country has yet to announce any steps, and the two policymakers said on Friday there was no agreement yet. "No decision has yet been taken on curbing gold imports," said one of the policy makers, who declined to be named.

This Reuters article, also filed from Mumbai, showed up on their Web site at 7:51 p.m. IST on their Friday evening---and it's another gold-related story I found on the gata.org Internet site.

¤ The Funnies

¤ The Wrap

In the 1990s, gold loans, despite their inherent wackiness and fraud, blossomed into a market involving upwards of 150 million oz, or two to three years of world mine production. What enabled gold loans to grow to such enormous levels was that Wall Street (the bullion banks, like JPMorgan) were able to convince the world’s gold miners to participate in the ill-fated scheme - to the miners eventual regret. In the end, two gold miners, Barrick and AngloGold, cost shareholders more than $10 billion each by falling for the gold loan/forward selling scam. More than one gold miner went bankrupt as a result of gold loans/forward sales.

The way the cockeyed scheme worked was like this – the Wall Street banks convinced central banks to physically release great amounts of gold (sitting fallow in CB vaults for eons) to the banks in return for a below market interest rate. The Wall Street banks then sold the gold on the open market (depressing prices) and lent the money to gold miners for expansion and capital projects, with the banks receiving fees and interest rate differentials galore. The miners agreed to pay back physical gold as their mine production increased. It all sounded great on paper (and worked that way for years) until gold prices went up. Then, it became increasingly clear that the gold miners had been tricked into establishing a giant short position in gold that nearly destroyed them.

Gold loans are fraudulent through and through, because the real owners don’t get the proceeds when the sale is made and the collateral ends up with an unrelated third party who has no obligation to return the metal. But because they appeared to work for a while, otherwise intelligent people overlooked the obvious fraud and collected the benefits while they were available. Today, those tracking gold loans report the amounts of these loans outstanding are down 95% from levels at the peak around the year 2000. For me, I can’t figure out how even 5% of these loans could still be in existence. - Silver analyst Ted Butler: 19 November 2014

Today's pop 'blasts from the past' are by a group that was part of the American pop scene back in the mid-to-late 1960s.  They didn't last long, but their two hits are classics.  It's a group called The Left Banke---and their two biggest hits are linked here and here; and unfortunately, I remember them like it was yesterday, except 'yesterday' was almost 50 years ago.  Where the %$*& has the time gone, I wonder?  It reminds me of the old saying that goes like this---"Life is like a roll of toilet paper.  The closer to the end you get, the faster it goes."  Ain't that the truth.

Today's classical 'blast from the past' is a virtuoso piece for violin and orchestra that was composed by Camille Saint-Saëns back in 1863 for Spanish violin virtuoso Pablo de Sarasate.  It's the Introduction and Rondo Capriccioso in A minor, Op. 28---a show piece of the first order of magnitude.  This performance  features the gifted Dutch violinist Janine Jansen---whom I just love to pieces!  It was recorded at an outdoor concert with the Berlin Philharmonic in the summer of 2006---all under the direction of Estonian-born conductor Maestro Neeme Järvi.  The link is here.

Friday was another day where the HFT traders and their algorithms were active in both gold and silver, as their footprints were obvious by the price action.  All the precious metals wanted to rally, but weren't allowed to.  Also note that the gold price touched its 50-day moving average moments before the Comex open, but got sold down the moment it happened---and then got sold down some more going into the New York lunch hour.  But the gold price managed to crawl back above the $1,200 spot price mark---and was allowed to close there.

As I said in yesterday's column, the last week going into the options and futures expiry for the December contract could be interesting---and that's proving to be the case.

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

Despite the deterioration in the Commercial net short positions in both gold and silver recently, the setups in both still remain very bullish---and the fact that the 'Big 8' shorts in silver are still attempting to reduce their positions in this metal, is a sign that [hopefully] this is all going to end sooner rather that later.

"Later" for me means sometime before the end of the year---but that will only occur if the powers-that-be want it to happen.

But as I and many others have said over the years, the gold card is the only card that the world's central bankers, along with the IMF, have left to play if they want to create an inflationary environment.  But will they play it---and if so, when?

So we wait some more.

With all monetary caution scattered in the wind with announcements out of China and Europe yesterday, it's obvious that the world's central banks have now moved "all in" in this global monetary experiment that will only end in tears at some point.  Only the timing of the ultimate denouement is unknown.

As Doug Noland stated in his Credit Bubble Bulletin commentary yesterday evening:

The stage had been set for very serious problems. When the 2007/2008 down cycle’s contagion eventually arrived at the “Core,” key intermediation processes faltered – leaving a highly inflated system extremely vulnerable to a crisis of confidence and Credit collapse. Importantly, when it comes to Bubbles, the sooner they come to an end the better. Systemic risk grows exponentially, a harsh reality that central bankers refuse to acknowledge.

The scope of today’s “global government finance Bubble” dwarfs the 2007’s mortgage finance Bubble. There’s a lot more to lose in this international Bubble and so much more to worry about. Instead of “subprime,” today’s “Periphery” includes tens of Trillions of vulnerable debt encompassing many countries and billions of people. Instead of U.S. prime mortgages and corporate debt, today’s “Core” includes central bank Credit and the greatest securities Bubble the world has ever experienced.

From the 1986 horror film The Fly comes the quote "Be afraid. Be very afraid."

And along with the Ukraine/Russia debacle, that's probably good advice at this point in history.

See you on Tuesday.

Ed Steer

]]>
Sat, 22 Nov 2014 11:34:00 +0000
<![CDATA[Dutch Bring 120 Tonnes of Gold Back to Amsterdam From New York]]> http://www.caseyresearch.com/gsd/edition/switzerland-net-exports-100-tonnes-of-gold-in-october/ http://www.caseyresearch.com/gsd/edition/switzerland-net-exports-100-tonnes-of-gold-in-october/#When:06:26:00Z "Gold wasn't allowed a sniff of the $1,200 spot price mark"

¤ Yesterday In Gold & Silver

The gold price chopped lower in Far East trading until 1:30 p.m. on their Thursday morning.  The ensuing rally got rolled over at 11:00 a.m. GMT---and was sold down until shortly before noon in New York.  Another rally commenced at that point---and that one lasted until around 3:30 p.m. EST, before chopping a few dollars lower in the the 5:15 p.m. electronic close.

The low and high ticks were reported as $1,176.20 and $1,196.60 in the December contract.

Gold finished the Thursday session at $1,194.50 spot, up $11.40 from Wednesday's close.  Net volume, although significantly lower than Wednesday's volume, was pretty decent at around 147,000 contracts.

Silver had a familiar pattern---getting sold down to its low tick of the day in morning trading in the Far East---and then rallying to is 11 a.m. GMT high in London.  From that point it got sold down pretty hard until the Comex open---and then it flopped and chopped around with a positive bias for most of the rest of the Thursday trading session in New York.

The low and high were recorded by the CME Group as $15.955 and $16.32 in the December contract.

Silver closed in New York yesterday at $16.25 spot, up 12 cents from Wednesday.  Net volume was 29,500 contracts, or thereabouts.

Platinum and palladium had similar charts to gold.  Their respective lows were in morning trading in the Far East---and they both chopped quietly higher until mid-afternoon in New York---and then didn't do much after that.  Platinum closed up 17 bucks---and palladium was up 6 dollars.  Here are the charts.

The dollar index closed in New York late on Wednesday afternoon at 87.69---and worked its way up to its 87.92 high shortly before 9 a.m. in London.  From there it got sold down to its 87.51 low tick at 9:30 a.m. EST.  Then it rallied [in very volatile trading] for the remainder of the day, closing in New York at 87.70, which was basically unchanged from Wednesday's close.

The intraday price swings in the dollar index are starting to get pretty wild, with the Thursday session being very much a continuation of what went on, on Wednesday.  Here's the 5-day chart to put my comments into some sort of 'historical' perspective---and it's price action one wouldn't hope to see in a reserve currency, let alone the world's major reserve currency.

The gold stocks gapped up about 3 percent at the open before sagging a bit into the New York lunch hour.  From there they rallied anew before getting sold down a bit in the last thirty minutes of the Thursday trading session.  HUI finished the day up 2.37 percent.

The silver stock followed a similar path, but rallied far more substantially during the latter part of the trading day before they too got sold off a bit heading into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 2.65%.

The CME Daily Delivery Report showed that 16 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 November remained unchanged at 28 contracts---minus the 16 contracts in the previous paragraph, of course---and silver's November o.i. has remained unchanged all week at 88 contracts.  I suppose that there's still a possible delivery surprise coming out of left field between now and next Friday, but from this data it's obvious that the November delivery month will close out quietly as we approach first notice day for the December delivery month.

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

Since yesterday was Thursday, Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the goings-on inside SLV as provided by the iShares.com Internet site at the close of business on Wednesday---and here is what he had to say--- "Analysis of the 19 November 2014 bar list, and comparison to the previous week's list:  3,450,391.8 oz were added (all to Brinks London).  No bars were removed or had a serial number change.

The bars added were from Korea Zinc (0.8M oz), Krasnoyarsk (0.8M oz), Kazakhmys (0.5M oz), KGHM (0.4M oz), and 18 others.  97% of the bars were never in SLV before (although some were dated 2012/2013).

The overallocation cannot be calculated, as part of one deposit was not completed reflected on the bar list, as there is about 957,379 oz of Tuesday's 2.4M oz deposit that is not yet reflected on the bar list."

The link to Joshua's website is here.

The U.S. Mint had a smallish sales report yesterday.  They sold 1,000 gold eagles---500 one-ounce 24K gold buffaloes---and 25,000 silver eagles.

There's a story posted in the Critical Read section about the current silver eagles sales from the U.S. Mint.  It's headlined "Eagle sales November 17 to satisfy voracious investor demand"---and you can just click on the headline if you want to read it now.

There was no gold or silver received at the Comex-approved depositories on Wednesday, but decent amount of both metals were reported shipped out.  In gold, there was 48,225 troy ounces removed from the Scotiabank warehouse---and the link to that activity is here.  And in silver there was 630,404 troy ounces withdrawn, most of which came from the CNT Depository---and the link to that action is here.

Well, The Central Bank of the Russian Federation updated their website with their October data yesterday as I said they would.  However, I was rather underwhelmed by the number of ounces of gold that they bought for their reserves during that period---only 600,000---as their governor said that they had purchased 150 tonnes of gold for their reserves so far this year.

Nick added it all up year-to-date---and I checked it myself as well---and it only comes to 133.5 tonnes.  As I mentioned in yesterday's column, they had to add 1.2 million ounces to get to the 150 tonne number, which they obviously didn't.  But the figures are what they are---and here's Nick's excellent chart.

I have a fair number of stories for you again---and I'll let you play the part of the editor once again.

¤ Critical Reads

New Scrutiny of Goldman’s Ties to the New York Fed After a Leak

From his desk in Lower Manhattan, a banker at Goldman Sachs thumbed through confidential documents — courtesy of a source inside the United States government.

The banker came to Goldman through the so-called revolving door, the symbolic portal that connects financial regulators to Wall Street. He joined in July after spending seven years as a regulator at the Federal Reserve Bank of New York, the government’s front line in overseeing the financial industry. He received the confidential information, lawyers briefed on the matter suspect, from a former colleague who was still working at the New York Fed.

The previously unreported leak, recounted in interviews with the lawyers briefed on the matter who spoke anonymously because the episode is not public, illustrates the blurred lines between Wall Street and the government — and the potential conflicts of interest that can result. When Goldman hired the former New York Fed regulator, who is 29, it assigned him to advise the same type of banks that he once policed. And the banker obtained confidential information, along with several publicly available facts, in the course of assignments from his bosses at Goldman, the lawyers said.

This news item appeared on The New York Times website at 9:10 p.m. EST on Wednesday evening---and I found it embedded in a GATA release yesterday morning.  It's worth reading.

A Quick Look at Goldman's Takeover of the U.S. Judicial System: N.Y. Fed Edition

Moments ago, in the aftermath of the latest scandal involving Goldman's Rohit Bansal getting material information from a NY Fed employee, finally admitted that the original Carmen Segarra "whistleblower" allegations, namely that there was a material weakness (as in it is non-existent) when it comes to the NY Fed's supervision of TBTF banks, by which we mean Goldman Sachs here, were founded and valid when at 4pm on the dot the NY Fed released this:

The Federal Reserve Board on Thursday announced two separate reviews that are underway at the Federal Reserve System to ensure that the examinations of large banking organizations are consistent, sound, and supported by all relevant information.

This Zero Hedge commentary from yesterday is worth your while as well---and it showed up on their Internet site at 4:43 p.m. yesterday afternoon EST---and I thank Washington state reader S.A. for sending it.  There was a similar story in the Financial Times which I found in a GATA release yesterday.  It's headlined "On the night before hearing, Fed asks if it's too much the tool of investment banks".

Here we go again: More snow for buried N.Y.

Upstate New York is about to be inundated, again, with something chilling: Snow. Meteorologists are predicting another three feet on top of the five-feet-plus already burying Buffalo.

Gov. Andrew Cuomo is calling the early-season snow that has blanketed northern New York and killed seven people a "historic event" that's bound to break records. Deaths have also been reported in Maine, Michigan and elsewhere in the U.S., bringing the toll so far linked to the extreme weather to 20.

Some Buffalo-area residents have been trapped in their snow-bound cars or homes for almost two days. Some 140 miles of Interstate 90, the main artery running across New York, remained closed, from Rochester to the New York-Pennsylvania state line.

This amount of snow if almost unimaginable---and  an 'historic event' it is. This story was posted on the upi.com Internet site at 4:36 a.m. EST on Thursday morning---and it's the first offering of the day from Roy Stephens.

Wall Street Stunned as Iceland Dares to Jail Banker Involved in 2008 Crash

The impossible is possible. Never say never.

Wall Street bankers are staring agog at headlines coming from Europe where, in Iceland, the former chief executive of one of the largest banks in the country which was involved in crashing the economy in 2008 has been sentenced to jail time.

As Valuewalk reports, in receiving a one year prison sentence, Sigurjon Arnason officially became the first bank executive to be convicted of manipulating the bank’s stock price and deceiving investors, creditors and the authorities between Sept. 29 and Oct. 3, 2008, as the bank’s fortunes unwound, crashing the economy with it.

It appears he was as shocked by the verdict as Wall Street-ers are, "this sentence is a big surprise to me as I did nothing wrong."

Of course all bankers are as pure as the freshly fallen snow---and it would take no time at all to fill up the world's jails with the crooks inside the world's banking community.  This Zero Hedge article appeared on their website at 10:02 p.m. last night EST---and I thank Harry Grant for sending it our way late last night.

American-born London mayor refuses to pay U.S. taxes, threatens to renounce citizenship

The Internal Revenue Service reportedly wants London Mayor Boris Johnson to write a check for taxes he owes to the United States government, but the UK politician says he isn’t paying.

Johnson, 50, has been the mayor of London since 2008 and is considering a bid at Parliament in the near future. In the meantime, however, he might soon find himself in hot water on the other side of the pond. Johnson, who was born in New York but moved at the age of five, told NPR host Susan Page during an interview last week that the US wants him to pay a capital gains tax owed by American citizens who earn income abroad.

Previously, Johnson wrote in a 2006 column that he was “getting a divorce from America” and would renounce his citizenship, noting “for years I have travelled exclusively on a British passport,” and not the US-issued one he also holds. That threat failed to materialize, but a question emailed to the mayor while he was being interviewed by NPR recently might have rekindled his interest — and without a doubt revealed another issue that has peculiarly pitted Johnson against the IRS.

“It is very hard but I will say this: the great United States of America does have some pretty tough rules, you know,” Johnson said. “You may not believe this but if you're an American citizen, America exercises this incredible doctrine of global taxation, so that even though tax rates in the UK are far higher and I'm Mayor of London, I pay all my tax in the UK and so I pay a much higher proportion of my income in tax, then I would if I lived in America.”

This very interesting story put in an appearance on the Russia Today website at 5:26 p.m. Moscow time on their Thursday afternoon, which was 9:26 a.m. in New York.  It's the second offering of the day from Roy Stephens.

‘Diabolical and absurd’: Outrage as 'Save the Children' gives Tony Blair Global Legacy Award

A decision by UK charity Save the Children to give Tony Blair its annual Global Legacy Award has unleashed a torrent of criticism highlighting the former PM’s role in Britain’s 2003 Iraq war and his controversial business dealings in the Middle East.

The former Labour leader, who is currently a key focus of a public inquiry into Britain’s invasion of Iraq, received the honor on Wednesday night at a star-studded gala hosted by the charity in New York.

Save the Children’s decision to offer Blair the award has provoked outrage across the UK, with critics insisting the move utterly discredits the charity.

This article was posted on the Russia Today Internet site at 6:17 p.m. Moscow time on their Thursday evening---and once again I thank Roy Stephens for sharing it with us.

UKIP's Reckless wins Rochester and Strood seat

UKIP has its second elected MP at Westminster after Mark Reckless won the Rochester and Strood by-election.

Mr Reckless received 16,867 votes, 2,920 more than Conservative candidate Kelly Tolhurst's 13,947, with Labour's Naushabah Khan third on 6,713.

The Green Party came fourth, while the Lib Dems got their lowest total ever.

Mr Reckless, whose defection from the Tories to UKIP triggered the contest in Kent, said: "If UKIP can win here, we can win across the country."

This news item appeared on the bbc.com Internet site at 2:42 a.m. EST this morning---and I thank Harry Grant for his second contribution to today's column.

Dutch government refuses to reveal ‘secret deal’ into MH17 crash probe

The Dutch government has refused to reveal details of a secret pact between members of the Joint Investigation Team examining the downed Flight MH17. If the participants, including Ukraine, don’t want information to be released, it will be kept secret.

The respected Dutch publication Elsevier made a request to the Dutch Ministry of Security and Justice under the Freedom of Information Act to disclose the Joint Investigation Team (JIT) agreement, along with 16 other documents. The JIT consists of four countries - the Netherlands, Belgium, Australia and Ukraine - who are carrying out an investigation into the MH17 disaster, but not Malaysia. Malaysian Airlines, who operated the flight, has been criticized for flying through a war zone.

Part of the agreement between the four countries and the Dutch Public Prosecution Service, ensures that all these parties have the right to secrecy. This means that if any of the countries involved believe that some of the evidence may be damaging to them, they have the right to keep this secret.

“Of course [it is] an incredible situation: how can Ukraine, one of the two suspected parties, ever be offered such an agreement?” Dutch citizen Jan Fluitketel wrote in the newspaper Malaysia Today.

Wow!  You couldn't make this stuff up!  This Russia Today news item was posted on their website at 12:41 p.m. Moscow time on their Thursday afternoon---and it's courtesy of reader 'h c'.  It's worth reading.

French Shipbuilders Float Out Second Mistral-Class Warship for Russia

Second Mistral-class amphibious assault ship built in France under contract with Russia was floated out Thursday, a RIA Novosti correspondent reported.

The helicopter carrier, named the Sevastopol, left its dry dock in the French port city of Saint-Nazaire before just a few onlookers, our correspondent noted.

Russia and France signed the $1.5 billion deal for two Mistral-class ships in June 2011. The first carrier, the Vladivostok, is expected to join the Russian Navy by the end of this year, while the Sevastopol is due to arrive in Russia in 2015.

But the deal has been in jeopardy after the West slapped Russia with economic sanctions over Ukraine. French President Francois Hollande in October threatened to suspend the deliveries of the ships, citing Russia’s alleged involvement in the Ukrainian conflict — a claim that Moscow has repeatedly denied.

This story appeared on the sputniknews.com Internet site at 8:28 p.m. yesterday evening Moscow time---and it's also courtesy of Roy Stephens.

Polish farmers block road over Russian sanctions

Polish fruit farmers blocked a road near Annopol and in Leokadiow in Lubelskie province in the southeastern part of the country on Tuesday, calling for more support from the Polish government after being hit hard by the Russian food embargo. Protesters brought traffic to a halt, moving along a crosswalk with banners, flags and placards.

In response to European sanctions, Russia imposed a one-year import ban on fresh produce from the EU in August. Prior to the embargo, Poland accounted for about 50 percent of apple imports to the Russian market.

The above two paragraphs are all there is to this brief news item that showed up on the Russia Today website at 3:50 p.m. Moscow time on their Wednesday afternoon.  Once again I thank Roy Stephens for sending it.

Ukraine death toll rises to more than 4,300 despite ceasefire: U.N.

The death rate in the Ukraine conflict has increased in the past eight weeks despite the declaration of a ceasefire in September, the United Nations said on Thursday.

In total, more than 4,300 combatants and civilians have been killed in eastern Ukraine since pro-Russian rebels seized border regions in April. Nearly a million people have fled the area, with a surge in the past two months, the U.N. said.

Since a formal ceasefire was agreed by Ukraine, Russia and the rebels in early September, an average of 13 soldiers, rebels, and civilians had died every day, a report by U.N. human rights monitors said.

This Reuters article, filed from Geneva, appeared on their Internet site at 9:07 a.m. EST yesterday---and it's courtesy of reader M.A.

Former Australian PM: Expanding NATO Was A Big Mistake

Why is it that top Western leaders seem to have a tendency toward wisdom only after leaving top office?

During Putin's visit to Australia for the G20 meeting former Australian P.M. Paul Keating gave an interview to Australian TV starkly critical of NATO.

He heavily criticized the West for making a serious error in extending NATO at the end of the Cold War.

He thinks that current events are a result of that flawed decision.

This interesting article appeared on the russia-insider.com website yesterday sometime---and it's courtesy of Roy Stephens once again.

‘Blackmail’: E.U. trying to force Serbia into Russia sanctions club, says senior M.P.

The E.U.’s attempts to coerce Serbia into joining anti-Russian sanctions are nothing but blackmail, says the head of the State Duma Foreign Affairs Committee.

Presently the European Union is trying to force Serbia, which is not an E.U. member, to join their sanctions program. They are practically blackmailing Serbia: either it joins the sanctions against Russia or [the bloc] won’t see it as a country with a chance of joining the E.U.,” M.P. Aleksey Pushkov (United Russia) told reporters at a Thursday press conference in Moscow.

The problem for Serbia is that in any case it has no prospects for joining the EU anytime soon. Even if they join the anti-Russian sanctions now, they would simply succumb to blackmailers and no one would accept them in the E.U. in one year for doing this,” he added.

The comments came after E.U.’s Enlargement Commissioner Johannes Hahn said that Serbia would have to join E.U. sanctions against Moscow if it wants to be part of the European Union.

This is another article from the Russia Today website---and this one was posted there at 10:43 a.m. Moscow time on their Thursday morning, which was 2:43 a.m. EST.  Once again I thank Roy Stephens for bringing it to our attention---and it's certainly worth reading.

China firm signs $12 billion deal to build Nigerian railway

A state-owned Chinese company has signed a $12 billion agreement to build a railway along Nigeria's coast that it billed as China's single largest overseas contract, state media said Thursday.

China Railway Construction Corp. Ltd. (CRCC) signed the official construction contract with the Nigerian government on Wednesday in Abuja, the Xinhua news agency said.

The Nigerian railway will stretch for 1,402 kilometres (871 miles) along the coast, linking Lagos, the financial capital of Africa's largest economy and leading oil producer, and Calabar in the east, according to the report.

The $11.97 billion deal marks China's largest single overseas contract project so far, it said, citing CRCC.

This interesting article, filed from Beijing, appeared on the france24.com Internet site at 8:45 a.m. Europe time on their Thursday morning, which was 2:45 a.m. in New York.  My thanks go out to South African reader B.V. for finding it for us.

China manufacturing index dips to six-month low: HSBC

Manufacturing activity in China stagnated in November, British banking giant HSBC said Thursday (Nov 20), warning of "significant" pressures on the world's second-largest economy as its key purchasing managers' index (PMI) hit a six-month low.

HSBC's preliminary PMI for the month came in at the 50.0 breakeven point dividing expansion and contraction, the bank said in a statement. It was lower than October's 50.4 and was the weakest reading since May's 49.4, according to the bank's data.

The index tracks activity in China's factories and workshops and is a closely watched indicator of the health of the economy, a key driver of global growth.

Protracted easing in new export order growth led output to contract for the first time in six months, while lingering deflationary pressures suggested domestic demand remained insufficient, Qu Hongbin, HSBC's economist in Hong Kong, said in the statement.

This news story put in an appearance on the channelnewsasia.com Internet site at 11:39 a.m. Singapore time on their Thursday morning---and it's the second offering of the day from reader M.A.

Oil industry risks trillions of 'stranded assets' on U.S.-China climate deal

Brazil's Petrobras is the most indebted company in the world, a perfect barometer of the crisis enveloping the global oil and fossil nexus on multiple fronts at once.

PwC has refused to sign off on the books of this state-controlled behemoth, now under sweeping police probes for alleged graft, and rapidly crashing from hero to zero in the Brazilian press. The state oil company says funding from the capital markets has dried up, at least until auditors send a "comfort letter".

The stock price has dropped 87pc from the peak. Hopes of becoming the world's first trillion dollar company have deflated brutally. What it still has is the debt.

Moody's has cut its credit rating to Baa1. This is still above junk but not by much. Debt has jumped by $25bn in less than a year to $170bn, reaching 5.3 times earnings (EBITDA). Roughly $52bn of this has been raised on the global bond markets over the last five years from the likes of Fidelity, Pimco, and BlackRock.

This longish, but must read article by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 9:52 p.m. GMT on their Wednesday evening---and it's the final offering of the day from Roy Stephens.  I thank him on your behalf, dear reader.

Here Are The Highlights From The Senate's Finding That Banks Manipulate Physical Commodities

“One focus for the subcommittee is the management of Detroit-area metal warehouses run by Metro Trade Services International, the largest U.S. warehouse company certified to store aluminum warranted by the London Metal Exchange for use in settling trades.

Since Goldman bought Metro in 2010, Metro warehouses have accumulated up to 85 percent of the U.S. LME aluminum storage market...

Since Goldman took over the warehouses, the wait to withdraw LME-warranted metal has increased from about 40 days to more than 600 days, reducing aluminum availability and tripling the regional premium for storage and delivery costs...

The investigation revealed a number of previously unknown details about these deals: that Goldman’s warehouse company paid metal owners to engage in “merry-go-round” deals that shuttled metal from building to building without actually shipping aluminum out of Metro’s system; that the deals were approved by Metro’s board, which consisted entirely of Goldman employees; and that a Metro executive raised concerns internally about the appropriateness of such “queue management.

This news item was posted on the zerohedge.com Internet site at 9:28 a.m. EST yesterday---and it's courtesy of reader M.A.

United States Mint resumes silver American Eagle sales Nov. 17 to satisfy voracious investor demand

Sales by the United States Mint to its authorized purchasers (APs) of 2014 American Eagle 1-ounce silver bullion dollar coins resumed Nov. 17, 12 days after being suspended because of a depleted inventory.

Sales resumed after the U.S. Mint was able to replenish its stockpile of coins. The U.S. Mint had 1,525,000 of the 2014 American Eagles silver dollars available Nov. 17 for APs to purchase on an allocation basis, and those purchasers bought 1,012,000 coins from the total allotted.

The U.S. Mint has experienced significantly increased investment demand over the past several weeks. Through the close of business Nov. 17, the Mint recorded cumulative sales of 40,393,000 of the silver American Eagles. Sales of the coins in 2014 are on track to break the 2013 sales record of 42,675,000 coins. (Cumulative sales may include coins minted in more than one year, so are not the same as yearly mintages.)

As I've said on many occasions all year long, this "investment demand" that they're talking about is NOT coming from John Q. Public.  That narrows it down to Ted Butler's Big Buyer.  This brief article appeared on the coinworld.com Internet site on Tuesday---and I thank reader Tolling Jennings for sharing it with us.

Unusual gold moves in Asian hours puzzle jittery traders

Some of the biggest price moves in gold since late October have, unusually, occurred in Asian hours and traders more accustomed to following the lead of their Western counterparts suspect a big increase in algorithmic trading may be to blame.

Sensitivity to the dollar-yen exchange rate may also help explain the moves, although some traders speculated that the timing looked suspiciously like attempts to catch Chinese traders off-guard during their lunch break.

Liquidity in Asia tends to be thin until Europe wakes up but recent weeks have been different: COMEX gold futures, the busiest gold contract in the world, have suffered sharp sell-offs in Asia, sometimes sparked by the news flow or currency moves but often for no identifiable reason.

"I have spoken to a lot of people about it and the general consensus seems to be that there is a big increase in algorithmic and high-frequency trading in this time zone nowadays as it can be quite easy to push about," he said.

It's JPMorgan et al---probably hand-in-hand with the BIS---and I've been writing about this for years.  Only now does the main stream media get interested, but it's an absolute guarantee that they won't dig any deeper.  This Reuters article, filed from Singapore, appeared on their website at 2:05 a.m. EST yesterday morning---and I found it in a GATA release.

Switzerland Net Exports 100 Tonnes of Gold in October

From looking at rising SGE withdrawals and Indian import in recent months, we knew demand was increasing consistently and huge amounts of physical gold had to be supplied from somewhere. As I’ve written in a previous post, this type of gold demand can’t be met by just mine supply and so the metal has to be sourced from countries that have large stockpiles, the usual suspects: the U.K., Hong Kong and Switzerland.

In 2013 the U.K. was severely drained (net 1,424 tonnes), last week we learned Hong Kong became a net exporter since August 2014, the latest trade data from Switzerland shows the Swiss net exported 100 tonnes of fine gold in October---75 tonnes net to India and 45 tonnes net to China.

Customs data of the usual suspects (Switzerland, the U.K. and Hong Kong) is getting exciting; they can’t net export gold forever. We know there are often shortages in these trading hubs, it’s only the price of gold that tells us otherwise.

The Financial Times reported there are currently shortages in London, from November 14:  As one refiner told me: “Over the past four weeks my cost of hedging has risen by 30 per cent. Not only that, but there is not enough liquidity in the physical market in London to settle my obligations as they come due. I have to fly gold from Zurich to London, because there just is not enough gold on offer in London. You never used to have to do that.”

The export numbers in the second paragraph don't add up, as 75 and 45 add up to 120 tonnes, so I'll be interested to see if Koos has an explanation for this in his next commentary.  This was posted on the bullionstar.com Internet site yesterday sometime---and despite the above issue, it's definitely worth reading.  I found it over at the gata.org Internet site.

Netherlands TV network highlights Koos Jansen in program on gold

GATA consultant and Bullion Star market analyst Koos Jansen got a prominent place this week in a report on gold broadcast on the "Een Vendaag" ("One Today") news program of the Netherlands public television network, Nederland 1.

The program had a nationwide audience in the Netherlands. It covered the Swiss Gold Initiative, substantial gold buying by China and Russia, the German Bundesbank's attempt to repatriate its gold from the Federal Reserve Bank of New York, and the possibility of a transformation of the world financial system that would reintroduce gold in some form. The program is not quite 8 minutes long---and can be viewed at Bullion Star's Internet site.

The program is in Dutch but you can activate excellent English subtitles by clicking on the "CC" button at the bottom of the YouTube window---and there's a transcript as well.  This is another story I found on the gata.org Internet site---and it's worth your while.

Dutch Bring 120 Tonnes of Gold Back to Amsterdam From New York

The Dutch central bank has secretly brought a large part of the national gold reserves being held in a secure depot in New York back to Amsterdam.

In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said.

The high security reparations for the move took months.

The central bank decided to bring some of its gold reserves back to the Netherlands to ensure a better spread, the bank said in a statement.

In addition, the bank hopes to boost consumer confidence by showing there is enough gold in the Netherlands to take the country through a new economic crisis.

So, why can't/won't Germany do the same thing.  This story was posted on the dutchnews.nl website this morning--and I found it on the Sharps Pixley website.

Koos Jansen: The Netherlands Has Repatriated 122.5t Gold From the U.S.

A few weeks ago I heard a rumor that the Netherlands were repatriating some of their official gold reserves from the FRBNY. From one of my sources I even heard which security logistics company is shipping the metal, but I was kindly asked to not share this company’s name.

Last week I was approached by a financial journalist, Theo Besteman, from the biggest newspaper in The Netherlands, De Telegraaf. He asked me if I knew anything about the repatriation of Dutch gold from the FRBNY as he heard from several sources DNB was following the German central bank in repatriating gold (for the ones that are under the assumption Germany has ceased its repatriation program, please read this). I told him I heard some rumors about it and that the source was one of the big security logistics companies. He wanted to know which one, but I couldn’t tell him that. Apparently the rumors were true and Besteman did a good job finding out what was happening. The front page of De Telegraaf today: Gold Shipped In Utmost Secret.

De Telegraaf reports that for years there have been doubts at the DNB if the Dutch gold was still in New York. After a very secret and almost military operation DNB has shipped gold from Manhattan to Amsterdam, to bring about a more balanced allocation of its gold reserves and give the Dutchcitizensmore confidence by storing the goldon ownsoil to guidethe country, ifnecessary, through a following major crisis. In the previous weeks many armored trucks were seen at the DNB in Amsterdam.

The impact of the Dutch gold repatriation can be huge. First of all, because it underlines more and more countries are getting nervous about their gold reserves stored in the U.S.  Venezuela repatriated most of its reserves from abroad in 2012, the year Germany also announced a repatriation schedule from the US and France. While Germany settled with the US to ship 300 tonnes spread over 8 years, the Dutch set a new trend to insist on immediate delivery. If more counties will follow there can be a global run on gold.

This commentary by Koos is also one I plucked from the Sharps Pixley website this morning---and it's an absolute must read.  It was posted on the bullionstar.com Internet site late on their Friday evening.

Gold-mining industry mostly under water, Gold Fields CEO says

Gold miners' costs are mostly higher than current spot prices, increasing the likelihood of write downs next year, according to Nick Holland, chief executive officer of Gold Fields Ltd.

Across the industry, costs are about $1,300 an ounce including debt repayments, Holland said by phone from Johannesburg today, citing analysts' research. Gold dropped 0.1 percent to $1,182 an ounce, bringing the decline since the beginning of 2013 to 29 percent.

"The industry by and large is under water," Holland said. "I would expect further write downs. Production I think will be curtailed but it will take some time to filter through the system."

Nick Holland certainly knows what's going on inside the gold market, but won't breath a word of it.  This Bloomberg story, filed from Johannesburg, showed up on their website at 12:44 a.m. Denver time yesterday morning---and it's another gold-related story I found on the gata.org Internet site.

¤ The Funnies











¤ The Wrap

I remain amazed that the world continues to miss the most important distinction between gold and silver, namely, how much of each exists. After all, something has to explain why the world’s investors are completely unaware of the physical and financial facts surrounding silver. I’ll tell you straight out – if there were only $15 billion worth of gold inventories in the world, I’d probably be a bigger gold bull than silver bull - if you can imagine that.

Fifteen billion dollars is such a pitifully small amount for what might exist in world inventories for either gold or silver that it would be reason enough to buy either if that valuation applied. Well, it does apply to silver and doesn’t apply to gold where the amount of gold in the world is measured in the trillions of dollars ($6.5 trillion, to be precise). Furthermore, very little of the $15 billion worth of world silver inventories is available for sale – according to ETF and inventory flows. I can’t prove it, but I doubt that if someone tried to buy just one billion dollars’ worth of physical silver currently (60 million oz), the transaction could not be completed below $30. - Silver analyst Ted Butler: 19 November 2014

Despite the positive close yesterday, gold wasn't allowed a sniff of the $1,200 spot price mark---but the gold price is getting dangerously close to its 50-day moving average [currently $1,208 the ounce] which has now drifted down to within fifteen bucks of yesterday's closing spot price.  The silver price is almost a dollar away from its 50-day moving average, so there's miles to go in that metal.

Here are the 6-month charts for gold and silver, so you can see this for yourself.

Once JPMorgan et al allow one or both of these metals to break above their respective 50-day moving averages, we'll find out in a hurry whether they'll step in front of them as sellers of last resort once again and kill them with little or no gains---something they've done twice already this year.  If they don't, then their respective prices will fly.  And as both Ted and I have stated on many occasions---nothing else matters---and it doesn't.

And as I write this paragraph, the London open is fifteen minutes away.  Gold and silver prices are unchanged from yesterday's close in New York, but both platinum and palladium popped a bit in the last half hour or so.  Net gold volume is around 18,000 contracts---and silver's is almost microscopic at 2,500 contracts.  The dollar index is rallying off its earlier low---and is down 7 basis points at the moment.

Both Ted Butler and I are more than interested in how the Friday trading session unfolds today, as we've had two surprise Friday rallies in a row that came totally out of the blue---and both times the 'Big 8' traders used [or most likely engineered] these rallies to cover significant amounts of their short positions in silver---and gold as well.  As Ted said in the quote in The Wrap section of my Thursday column, it appeared that the strange price volatility on Wednesday was engineered by 'da boyz' for the same purpose.

Today at 3:30 p.m. EST we get both Commitment of Traders Reports for positions held at the close of COMEX trading on Tuesday.  We've had the second of the two big Friday rallies in both gold and silver during the reporting week---and I'll be more than interested in what these reports tell us.  I'll have it all for you in Saturday's column.

And as I fire today's column out the door at 5:59 a.m. EST, I note that gold and silver got sold down below yesterday's close in New York, shortly before 9 a.m. GMT in London---and are now back above unchanged, but gold is still being held below the $1,200 spot price mark.  Both platinum and palladium are still up on the day and attempting to break out to the upside.  Net gold volume is now around 53,000 contracts---and silver's net volume has blown out to 10,000 contracts.  The dollar index, which was down 7 basis points when I last reported on it fifteen minutes before the London open, took off to the upside minutes after the London open---and now stands at 88.03---up 33 basis points at the moment---but off its 10:00 a.m. GMT high tick.

I'm somewhat surprised that JPMorgan et al didn't use the dollar rally to beat the living snot out of the gold and silver prices when that happened, but the day is still young---and the COMEX trading session is dead ahead.  But the fact that they didn't may mean they have other problems at the moment.

As I alluded to a few paragraphs ago, in light of what happened during the prior two Friday's trading sessions, the Friday session today could prove interesting---and absolutely nothing will surprise me when I check the charts later this morning.

That's all I have for today.  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, 21 Nov 2014 06:26:00 +0000
<![CDATA[As the “Sanctions War” Heats Up, Will Putin Play His ‘Gold Card’?]]> http://www.caseyresearch.com/gsd/edition/as-the-sanctions-war-heats-up-will-putin-play-his-gold-card/ http://www.caseyresearch.com/gsd/edition/as-the-sanctions-war-heats-up-will-putin-play-his-gold-card/#When:06:59:00Z "Unusual is an understatement. A better word would be astonishing."

¤ Yesterday In Gold & Silver

After the usual down tick at the New York open at 6:00 p.m. on their Tuesday evening, the gold price got sold down about five bucks in the first four hours of Wednesday morning trading in the Far East.   It didn't do much until the London open, where the price managed to struggle and break the $1,200 spot price mark on a couple of occasions, with the last one coming at the 10:30 a.m. GMT London gold fix---and by 10:30 a.m. EST, gold was down a couple of bucks.

Then JPMorgan et al, along with their HFT partners in crime, ambushed the market with their algorithms---and the gold price was down twenty bucks in less than 20 minutes.  Then at noon, the price got catapulted higher until it hit its Tuesday closing price in New York.  It hung around unchanged until about 2:20 p.m. in electronic trading, before getting sold down another fourteen bucks by 3:15 p.m. EDT.  From that point it traded sideways into the 5:15 p.m. close.

The high and low ticks were reported by the CME Group as $1,201.70 and $1,173.90 in the December contract.

Gold finished the Wednesday trading session at $1,183.10 spot, down $14.40 from Tuesday's close.  Gross volume was over the moon at 315,000 contracts, but once the roll-overs were subtracted, it netted out at 216,000 contracts, which is still a gargantuan number.

Here's gold's 5-minute tick chart from yesterday courtesy of reader Brad Robertson---and note the volumes on the price moves.   Remember to add two hours for New York Time---and the 'click to enlarge' feature works wonders here.

Silver's price path on Wednesday was the same as gold's, but different in some respects.  The low of the day came around 12:30 p.m. Hong Kong time---and from that point it rallied unsteadily until a few minutes after the COMEX open---and then it flat-lined into the JPMorgan-sponsored shenanigans at 10:30 p.m. in New York.  The noon silver rally blew far past its Tuesday closing price but, once again, 'da boyz' were there to beat silver down to a loss on the day by 2:45 p.m. EST---and it traded flat into the close from there.

The low and high ticks were recorded as $15.87 and $16.535 in the December contract, an intraday move of 4 percent.

Silver was closed on Wednesday at $16.13 spot, down 6 cents from Tuesday's close.  Gross volume was sky-high as well, north of 113,000 contracts, but it all netted out to 57,500 contracts---which is still huge by any stretch of the imagination.

Platinum and palladium weren't spared, either---and both got sold down substantial amounts on the day.  Platinum was closed down 16 bucks---and palladium was closed down 10 bucks.  Note that palladium's high tick came at exactly 10 a.m. EST.

The dollar index closed the Tuesday trading session at 87.61---and it's 87.77 high tick came at 11 a.m. Hong Kong time on their Wednesday morning.  From there the index chopped lower---and on at least three occasions it appeared that 'gentle hands' were required---and provided.  The 87.42 low tick came around 2:15 p.m. EST---and from there it rallied back to above unchanged in very short order.  From there the index chopped sideways, closing the Wednesday session at 87.69---up 8 basis points on the day.

Despite the fact that gold was up a few bucks at the opening of the equity markets in New York yesterday, the gold stocks opened down---and stayed there for the remainder of the day, with the HUI closing almost on its low tick, down 6.03%---giving back almost all its gains from Monday and Tuesday.

It was more or less the same story in the silver equities, as they closed near their lows as well.  Nick Laird's Intraday Silver Sentiment Index closed down 5.76%.

The CME Daily Delivery Report showed that one lonely gold 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 the November delivery month is 28 contracts, up 8 from yesterday's report---and for the third day in a row the November o.i. for silver was unchanged at 88 contracts.

There was a withdrawal reported from GLD yesterday.  This time an authorized participant took out 67,271 troy ounces---and as of 9:55 p.m. EST yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes to their gold and silver ETFs as of the close of trading on Friday, November 14.  Their gold ETF declined by 15,966 troy ounces---and their silver ETF dropped by 12,784 troy ounces.

There was a small sales report from the U.S. Mint.  They didn't sell any gold, but sold another 40,000 silver eagles.

It was another decent volume in gold over at the COMEX-approved depositories on Tuesday, but that activity was dwarfed once again by what happened in silver.

In gold, nothing was reported received, but 32,935 troy ounces were reported shipped out---and the link to that activity is here.  In silver, there was 1,084,875 troy ounces reported received---and 760,782 troy ounces shipped out for parts unknown---and the link to that action is here.

Since today is the 20th of the month---and it falls on a weekday---The Central Bank of the Russian Federation will update its website with data for the month of October.

Included in it will be the amount of gold that they have purchased for their reserves during that month---and one of the first stories in my in-box yesterday morning was Mark O'Byrne's commentary over at goldcore.com---and the headline read "Gold Rises After Unusual Russian Central Bank Gold Buying Announcement".  I have the full story in my column, but you can read it now if you wish.

In that story, Russian Central Bank Governor Elvira Nabiullina made the statement that the bank had purchased 150 tonnes of gold so far this year.  Doing some adding and subtracting from Nick Laird's "Russian Reserves" chart shows that they bought pretty close to 1.2 million troy ounces during October to make that 150 tonne number work out right, or around 37 tonnes.

This news will be all over the Internet today, I'm sure---and I'll have the chart, plus the actual number, in tomorrow's column.

Yesterday I got an e-mail, plus a chart, from GATA's good friend Richard Nachbar---and here's what he had to say for himself:

Hi Ed!

Hello from the Weather Channel's winter headquarters! Between lake-effect snow bands, we thought it would be a good time to update our in-house U.S. 90% SILVER COINS graph, depicting the premium/discount history going back to 1998.

You may recall that I sent the previous update to you in May 2013, right after the big silver price smack down, when the premium on these popular coins spiked to above 15% and the chart left one open to the possibility of a third spike to 40%.

Looking back today, hindsight shows us that the premiums eventually drifted back to 5%, then flat a few weeks ago. Then the recent silver price drop to $15.00 per ounce brought out more buyers than sellers and the premium shot up to 10.52% last Friday where we also stand today.  The only way I see the premium going much higher would be if silver prices fell below $15.00, as in late 2008.  I would be happy to see the rising premium alternative of a shortage across the entire spectrum of silver products combined with rising silver prices, but in my opinion that will not happen in 2014.

So, we wait.

Richard

I don't have all that many stories today, although some of them are rather lengthy---and I hope you have the time for the most important ones.

¤ Critical Reads

Treasury: Global Investors Pour Record Amount Into U.S.

The U.S. posted a record inflow of long-term portfolio investments in September as the dollar strengthened and foreign buyers accumulated corporate debt, Treasurys and agency securities.

Foreigners bought a net $164.3 billion in long-term financial assets after $52.1 billion in purchases in August, the Treasury Department said in a statement Tuesday in Washington. The previous record was an inflow of $139.7 billion in March 2010.

The figures suggest the U.S. is luring investors with economic growth that’s outpacing other developed nations, as the euro area faces low inflation and slack demand and Japan copes with a recession. The data also showed Americans are selling foreign securities at a record pace.

The U.S. is looking like the cleanest dirty shirt from a global perspective,” said Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York. “You had the U.S. actually lead the way in global growth, and a lot of people were attracted by that — they’re trying to keep their holdings more domestic.”

"Cleanest dirty shirt" pretty much sums it up, as does the phrase "the best looking horse in the glue factory."  Today's first news item was posted on the moneynews.com Internet site at 5:57 p.m. EST Wednesday afternoon---and it's courtesy of West Virginia reader Elliot Simon.

Yellen Gets That Sinking Feeling Greenspan Once Knew

Alan Greenspan couldn’t control long-term interest rates a decade ago, and bond investors are betting Janet Yellen’s luck will be no better.

When then-Federal Reserve Chairman Greenspan raised the benchmark overnight rate from 2004 to 2006, long-term borrowing costs failed to increase, thwarting his attempts to tighten credit and curb excesses that contributed to the worst financial crisis in 80 years.

“We wanted to control the federal funds rate, but ran into trouble because long-term rates did not, as they always had previously, respond to the rise in short-term rates,” Greenspan said in an interview last week. He called this a “conundrum” during congressional testimony in 2005.

That same year, then-Fed Governor Ben S. Bernanke said a glut of investment dollars from overseas was holding down U.S. interest rates as savers in economies such as China sought safe places to stash their export earnings.

This Bloomberg article, filed from New York, appeared on their Internet site at 2:08 p.m. EST yesterday afternoon---and it's the second offering in a row from Elliot Simon.

Editorial: In Mr. Obama’s own words, acting alone is ‘not how our democracy functions’

Democrats urging President Obama to “go big” in his executive order on immigration might pause to consider the following scenario:

It is 2017. Newly elected President Ted Cruz (R) insists he has won a mandate to repeal Obamacare. The Senate, narrowly back in Democratic hands, disagrees. Mr. Cruz instructs the Internal Revenue Service not to collect a fine from anyone who opts out of the individual mandate to buy health insurance, thereby neutering a key element of the program. It is a matter of prosecutorial discretion, Mr. Cruz explains; tax cheats are defrauding the government of billions, and he wants the IRS to concentrate on them. Of course, he is willing to modify his order as soon as Congress agrees to fix what he considers a “broken” health system.

That is not a perfect analogy to Mr. Obama’s proposed action on immigration. But it captures the unilateral spirit that Mr. Obama seems to have embraced since Republicans swept to victory in the midterm elections. He is vowing to go it alone on immigration. On Iran, he is reportedly designing an agreement that he need not bring to Congress. He already has gone that route on climate change with China.

The legal or constitutional case for each is different, but the rationales overlap: Congress is broken, so Mr. Obama must act. Two-thirds of Americans did not vote in the midterms, and the president must represent them, too. He has tried compromise, and the Republicans spurned him.

This 'up yours Mr. President' from The Washington Post's Editorial Board appeared on their website on Monday---and that makes it three in a row from Elliot Simon.

Ice to close upper Mississippi from November 20, earliest on record

The shipping season on the upper Mississippi River will end on Thursday as ice surrounding locks and dams near Minnesota's Twin Cities forced the earliest winter closure on records that date back to 1969, the U.S. Army Corps of Engineers said.

"There's so much ice through the whole system," said Bryan Peterson, navigation manager for the Army Corps' St. Paul district. "They're getting the barges they can out and not risking getting stuck there all winter."

There were two tow boats waiting to pass lock and dam No. 2 near Hastings, Minnesota. Once they moved down river, no more vessels were expected, Peterson said.

The closure came as a blast of arctic air brought early snow and freezing temperatures across the United States.

This Reuters story, filed from Chicago, appeared on the news.yahoo.com Internet site about 8:45 CST last evening---and I found it all by myself!

Jail threat is biggest deterrent for bad bankers, says Bank of England official

The threat of jail is a far more effective tool for reining in bad behaviour at banks than the prospect of losing bonuses, according to the Bank of England policymaker leading a review into financial market regulation.

Minouche Shafik told MPs that criminal sanctions “are top of the list in making them think twice, making them pay is further down the list”.

It came as a court in Iceland sentenced the former chief executive of Landsbanki, to 12 months in prison for market manipulation.

Sigurjon Arnason was convicted of manipulating the bank's share price and deceiving investors in the run up to the financial crisis that saw Iceland's banking system collapse.

At least someone agrees with me, but talk is cheap.  Will they walk the walk?  I found this story on the telegraph.co.uk Internet site at 6:41 p.m. GMT on Wednesday evening.

Hungary to start South Stream construction in 2015 despite western pressure

Hungary plans to break ground next year on its stretch of the South Stream pipeline to send natural gas from Russia to Europe. It is in defiance of E.U. and U.S. calls to halt the project over frosty relations with Moscow.

One major reason Hungary has thrown its support into South Stream is the lack of a better option since the EU-backed Nabucco pipeline, which was supposed to deliver gas from Azerbaijan to Europe, failed.

"Nabucco will not be built and after nearly 10 years of hesitation, and especially in light of the Ukraine situation, we need to act. This is a necessity," Hungarian Energy Minister Andras Aradszki told Reuters.

This Russia Today story showed up on their Internet site at 4:45 p.m. Moscow time on their Wednesday afternoon, which was 8:45 a.m. EST.  My thanks go out to Roy Stephens for sending it.

Ukraine's coal reserves 'unprecedented' low, not enough for another month - Deputy Energy Minister

Two out of ten coal-fired power plants in Ukraine only have enough stock for a few days, as the key coal mines supplying the plants are located in Donbass where Kiev and self-defense forces are fighting, says Ukraine's Deputy Energy Minister Yury Zyukov.

In 2012 and 2013 Ukraine extracted about 85 million tons of coal, of which 40 billion tons were used for domestically, Zyukov told Glavkom magazine, adding that previously Ukraine even exported coal.

“Situations as this one have never happened in the history of an independent Ukraine, we have never had such precedents.”

“Do you know that Zmiev TPP has 30 thousand tons of coal reserves and the Tripol TPP has 50 thousand? That is literally enough for just for a few days,” Zyukov said. “That is why we needed coal from South Africa - we have no reserves.”

This is another article from the Russia Today Internet site.  This one showed up on there at 4:09 p.m. Moscow time yesterday afternoon---and it's the second contribution in a row from Roy Stephens.

Why the Western Hype of Fake Russian Invasions?

On Friday, the Ukrainian military’s P.R. machine spun-up its latest episode of the illusive “Russian Invasion”, this time accusing Moscow of dispatching a column of 32 tanks and “truckloads of Russian troops” into the country’s eastern region.

The West are being very choosy with their language – in case they have to deny they ever said it later. Presently, the West and Kiev are stopping short of labeling the non-event as an invasion, instead calling it “Russian aggression”, and a “cross-border incursion” to aid separatists, with the all-important caveat of “unconfirmed report”, a PR system standardized by CIA media handlers currently in residence inside the U.S.-backed Kiev regime.

Another ‘Russian Invasion’?

The timing, and the sheer desperation of this latest P.R. move is designed for one thing: deflecting public attention away from the fact that Ukrainian military have already broken the fragile ceasefire with rebels, as Kiev resumes its shelling of civilian areas around Donetsk and Lugansk.

This article, a repost from the 21stcenturywire.com Internet site back on November 8---appeared on the russia-insider.com Internet site just after midnight Moscow time on their Wednesday morning---and it's courtesy of South African reader B.V.  It's worth reading.

The 'Caliphate's' Colonies: Islamic State's Gradual Expansion into North Africa

The caliphate has a beach. It is located on the Mediterranean Sea around 300 kilometers (186 miles) south of Crete in Darna. The eastern Libya city has a population of around 80,000, a beautiful old town and an 18th century mosque, from which the black flag of the Islamic State flies. The port city is equipped with Sharia courts and an "Islamic Police" force which patrols the streets in all-terrain vehicles. A wall has been built in the university to separate female students from their male counterparts and the disciplines of law, natural sciences and languages have all been abolished. Those who would question the city's new societal order risk death.

Darna has become a colony of terror, and it is the first Islamic State enclave in North Africa. The conditions in Libya are perfect for the radical Islamists: a disintegrating state, a location that is strategically well situated and home to the largest oil reserves on the continent. Should Islamic State (IS) manage to establish control over a significant portion of Libya, it could trigger the destabilization of the entire Arab world.

The IS puts down roots wherever chaos reigns, where governments are weakest and where disillusionment over the Arab Spring is deepest. In recent weeks, terror groups that had thus far operated locally have quickly begun siding with the extremists from IS.

In September, it was the Algerian group Soldiers of the Caliphate that threw in its lot with Islamic State. As though following a script, the group immediately beheaded a French mountaineer and uploaded the video to the Internet. In October, the "caliphate" was proclaimed in Darna. And last week, the strongest Egyptian terrorist group likewise announced its affiliation with IS.

This longish essay was posted on the German website spiegel.de at 7:20 p.m. EDT on their Tuesday evening---and it's courtesy of Roy Stephens. Normally I'd save this for the weekend, but it's a slow news day, so here it is now.

Inside Islamic State’s oil empire: how captured oilfields fuel Isis insurgency

Islamic State has consolidated its grip on oil supplies in Iraq and now presides over a sophisticated smuggling empire with illegal exports going to Turkey, Jordan and Iran, according to smugglers and Iraqi officials.

Six months after it grabbed vast swaths of territory, the radical militant group is earning millions of dollars a week from its Iraqi oil operations, the U.S. says. Coalition air strikes against tankers and refineries controlled by Isis have merely dented – rather than halted – these exports, it adds.

The militants control around half a dozen oil-producing oilfields. They were quickly able to make them operational and then tapped into established trading networks across northern Iraq, where smuggling has been a fact of life for years. From early July until late October, most of this oil went to Iraqi Kurdistan. The self-proclaimed Islamic caliphate sold oil to Kurdish traders at a major discount. From Kurdistan, the oil was resold to Turkish and Iranian traders. These profits helped Isis pay its burgeoning wages bill: $500 (£320) a month for a fighter, and about $1,200 for a military commander.

The U.S. has pressured Iraqi Kurdistan’s leaders to clamp down on smuggling, with limited success. But oil is still finding its way to Turkey via Syria, with Islamic State deftly switching from one market to another, smugglers say, with cheap crude channelled to Jordan instead. On Monday, a U.N. panel urged countries neighbouring Iraq and Syria to seize oil trucks that continue to flow out from jihadist-occupied territory.

This essay appeared on The Guardian website at 1:06 p.m. GMT yesterday afternoon---and I thank reader B.V. for digging it up for us.

Crashing Steel Prices Lead to Largest Chinese Bankruptcy, "Will Be Followed By Others"

With growth rates for steel products at or near record lows and prices for end-product having plunged to record lows, it is little surprise that the Steel industry would provide the largest Chinese bankruptcy yet in this cycle.

As Bloomberg reports, unlisted Haixin Iron & Steel - which halted production and defaulted on CNY3 bn in March - has started bankruptcy proceedings. Having spent 8 months hoping for the government bailout that every Western onlooker believes is every firm's god-given right, a reorganization application for the Wenxi, Shanxi province-based company (with $1.7 billion of total debt) was accepted by the Yuncheng City Intermediate People’s Court.

This is just the start as "Haixin Group’s bankruptcy will be followed by others," according to researcher Mysteel.com's Chief Analyst Xu Xiangchun.

This interesting article put in an appearance on the Zero Hedge website at 8:16 a.m. EST on Wednesday morning---and I thank reader 'David in California' for passing it around.

Senate report criticizes Goldman and JPMorgan over their roles in commodities market

A two-year Senate-led investigation is throwing back the curtain on the outsize and sometimes hidden sway that Wall Street banks have gained over the markets for essential commodities like oil, aluminum, and coal.

The Senate's Permanent Subcommittee on Investigations found that Goldman Sachs and JPMorgan Chase assumed a role of such significance in the commodities markets that it became possible for the banks to influence the prices that consumers pay while also securing inside information about the markets that could be used by the banks' own traders.

Bankers from both firms, along with other industry executives and regulators, will testify about the allegations at hearings on Thursday and Friday.

The report provides an unprecedented level of detail about the enormous global operations the banks have built up in recent years since politicians and regulators lifted long-time curbs on banks owning physical commodities and infrastructure.

Of course this includes the precious metals, plus oil and copper.  This must read article put in an appearance on The New York Times website at 5:01 p.m. EST on Wednesday afternoon---and the first person through the door with it was U.K. reader Nigel Bunting.  There was also an AP story about it as well.  It appeared on the abcnews.go.com Internet site at 7:27 p.m. EST last evening.  It's headlined "Report: Role of 3 Big Banks in Commodities Risky"---and it's courtesy of Elliot Simon.

CFTC Launches National Campaign to Protect Consumers from Financial Fraud

The U.S. Commodity Futures Trading Commission (CFTC) today launched CFTC SmartCheck, a new national campaign to help investors identify and protect themselves against financial fraud. The comprehensive campaign includes a new website, a national advertising campaign and interactive videos that will help investors spot investment offers that are potentially fraudulent. The new website, SmartCheck.CFTC.gov, unveiled today, is an educational tool that helps investors conduct background checks of financial professionals.

“The CFTC is committed to protecting investors from fraud, and we demonstrate that commitment today with the launch of CFTC SmartCheck,” said CFTC Chairman Tim Massad. “This campaign provides investors with new interactive tools that include the website as well as a targeted advertising campaign and collaborative outreach with allied organizations.”

Over the coming months, the CFTC SmartCheck campaign will include online, television, and print advertising slated to run nationwide and additional outreach efforts with organizations aligned with the CFTC’s mission to reduce financial and investment fraud. The campaign will also feature special events to reach investors and encourage them to use the online tools available at SmartCheck.CFTC.gov. In addition to the background-check tools, the SmartCheck.CFTC.gov website includes a range of information for investors, including interactive videos that help illustrate how to avoid fraud.

This news item showed up on the CFTC's website yesterday---and I found it embedded in silver analyst Ted Butler's mid-week commentary yesterday---and this was his scathing right-on-the-money comment on it.  "Here’s the latest announcement from the CFTC warning the public on financial fraud in commodities. Funny, there was no mention of the ongoing scam in COMEX silver which many thousands of market participants have written the agency about. I hate to be cynical but why does this seem like a perfect bureaucratic solution – instead of resolving a manipulation most everyone is aware of, come out instead with a public campaign to warn people of financial fraud in commodities. Marvelous."  I know what we should all do, dear reader, is click on the website and ask them to check out the precious metal price rigging scam on the COMEX.

Gold Rush in Ohio? Small Town Plays Big Role

Building contractor Alan Stockmeister is known around town for his stewardship of local businesses: radio stations, a movie theater and a bank, for example. But nothing has been quite like his refinery just off Main Street, which has become an outpost in the multibillion-dollar global gold trade.

Ohio Precious Metals LLC owns one of five refineries in the U.S.—there are 73 world-wide—certified to melt scrap gold and pour it into ingots that can be traded on global markets. OPM’s more than 170 workers process several billion dollars a year in gold and silver headed for banks and jewelers in New York, London and Shanghai.

“Historically, gold refineries have been near production sites, mines or the big financial centers where gold is traded,” says David Jollie, a London-based analyst at gold trader Mitsui Precious Metals. Ohio “is not really one of those places.”

OPM has been able to stay in south-central Ohio in part because gold prices, while 30% below their 2011 peak, are about triple what they were in 2004. Sales of gold to make rings, watches and electronics have increased 70% over the last 10 years, according to Thomson Reuters GFMS. Recent price declines mean that gold production at mines hasn’t kept pace, in turn fueling demand for cheaper-to-produce gold scrap.

OPM is a well-known brand name in our store---and reader Ken Hurt sent this Wall Street Journal story our way yesterday

Silver demand to fall 7% in 2014 – Thomson Reuters GFMS

Demand for silver will post a 7% decline in 2014 because of a slower pace of buying by jewellers and industrial fabricators in the first three quarters of the year, metals consultant Thomson Reuters GFMS said on Tuesday.    

Harmonized European sales tax rates that started in January have driven up retail silver investment product prices, reducing demand on the continent, the Thomson Reuters unit said in an interim market review.     

Thomson Reuters GFMS said it expected total physical demand, which includes jewellery, coins and bars, silverware and industrial fabrication, to fall 6.7% to 31,243.44 tonnes in 2014 from a record high of 33,498.44 tonnes last year.    

Silver industrial demand is forecast to drop 1.8% as the electronics sector keeps shifting to cheaper metals. Jewellery consumption should fall 4.4% because retailers are pushing more gold products to take advantage of lower bullion prices, GFMS said.     For the full year, Thomson Reuters GFMS now forecasts silver prices to average $19/oz an ounce, a 20% decline from $23.79/oz in 2013.

Since it was Gold Field Mineral Services that said this, I'd take this Reuters story with a big grain of salt.  It was picked up by the miningweekly.com Internet site yesterday---and I thank Malcolm Roberts for sharing it with us.

Koos Jansen: Why did European central banks sell gold?

Focusing on the Netherlands Central Bank's reduction of its gold reserves, Bullion Star market analyst and GATA consultant Koos Jansen asks why the European central banks sold (or purported to sell) so much gold from the announcement of the Washington Agreement on Gold in 1999 through 2010, when such sales stopped almost completely. Jansen cites a comment by the Dutch treasury secretary in 2011 in support of his speculation that the gold sales may have been intended to help redistribute and equalize official gold reserves around the world.

This is exactly what the U.S. economists and fund managers Paul Brodsky and Lee Quaintance speculated in 2012 -- that central banks were moving their gold around so that nations would be better prepared for a complete resetting of the world financial system, in which gold would play an important part for building confidence.

Of course on a planet with actual financial journalism, mainstream news organizations would question central banks about this -- and about everything else central banks do. Since we're living on Earth, Jansen's citing the Dutch parliamentary archive and posing the question it suggests will have to suffice today.

This commentary by Koos is embedded in this GATA release from yesterday---and I thank Chris Powell for writing the above paragraphs of introduction.  It's worth reading.

Support for Swiss gold referendum proposal weakens as campaign heats up

Support among Swiss voters for a referendum proposal that would force a huge increase in the central bank's gold reserves has slipped to 38 percent, an opinion poll showed on Wednesday, falling short of the majority backing it needs to become law.

Under the "Save our Swiss gold" proposal, the Swiss National Bank would be banned from selling any of its gold reserves and would have to hold at least 20 percent of its assets in the metal, compared with 7.8 percent last month. ...

Wednesday's poll, conducted by Berne-based research institute gfs.bern in partnership with Swiss broadcaster SRG, showed 47 percent opposed the initiative, which has been led by the right-wing Swiss People's Party, while 15 percent were undecided or gave no answer.

This Reuters article, co-filed from Zurich and London, put in an appearance on their website at 11:29 a.m. EST on Wednesday---and I found this story over at the gata.org Internet site.

Gold Rises After Unusual Russian Central Bank Gold Buying Announcement

Russia’s central bank bought about 150 metric tons of the metal this year, announced Governor Elvira Nabiullina yesterday. The pronouncement immediately created buying in the market, prompting gold to rise to a two week high at $1,200 an ounce.

Russia's central bank Governor Elvira Nabiullina told the lower house of parliament about the significant Russian gold purchases. She is an economist, head of the Central Bank of Russia and was Vladimir Putin's economic adviser between May 2012 to June 2013. 

This announcement is unusual and to our knowledge has not happened before. The announcement by the Russian central bank governor was likely coordinated with Putin and the Kremlin and designed to signal how Russia views their gold reserves as a potential geopolitical and indeed financial and currency war weapon.  

Gold currently constitutes for around 10% of the bank's gold and forex reserves, she added.

"Unusual" is an understatement.  A better word would be "astonishing"---and in case it might have been lost on you, dear reader, I'd bet that this announcement was a veiled threat that, as I've said many time in the past, all Putin has to do is say the word---and the precious metal price management scheme would blow up in a New York minute---and take a large chunk of the Western banking/financial system with it---including Canada's beloved Scotiabank.  This must read commentary by Mark O'Byrne appeared on the goldcore.com Internet site yesterday---and the first person through the door with it was South African reader B.V.

As The “Sanctions War” Heats Up, Will Putin Play His ‘Gold Card’?

One intriguing possibility is one which Russia has, in fact, contemplated before: Backing the currency with Russia’s gold reserves.[6] In the late 1980s, as the Soviet Union was breaking up, the rouble was in free-fall and inflation was soaring. Russia had essentially zero access to global capital markets and relied on oil exports for hard currency with which to trade with other nations. In 1989, Premier Gorbachev invited two prominent US economists to Russia, where they met with senior economic policy officials and recommended precisely this as the best way to stabilise the rouble. One of the two was former Fed governor Wayne Angell; the other, Jude Wanniski of ‘supply-side’ economic fame. In 1998, Mr Wanniski wrote that he “became alarmed about the financial collapse in Russia,” and decided to “write a piece on how to fix Russia right away, before it was in complete chaos.” In the Wall Street Journal editorial that followed, Mr Wanniski explained the longer history of the gold-backed rouble idea:

In September 1989, the Soviet government of Mikhail Gorbachev invited me to Moscow for nine days to discuss my unorthodox views on how the U.S.S.R. could make the conversion to a market economy. I’d been arguing that the process had to begin by fixing the ruble price of gold at a credible rate of exchange, which I believed then would be a relatively easy thing to do. I still believe that.

This long essay by John Butler appeared on David Stockman's website yesterday---and certainly falls into the absolute must read category.  The first person through the door with this commentary was Dan Lazicki.

¤ The Funnies









¤ The Wrap

When I started [Wednesday's column], silver and gold were steady, only to sell off suddenly around 10:30 AM (EST). This sell-off was followed by a sharp rally, particularly in silver, only once again to sell-off as I complete this piece. Although I am adamant about reading too much into price movement to gauge what’s going on under the surface, there’s something about this volatility that is encouraging. I’m still of the mind that the COT structures in gold and silver are exceedingly bullish and it appears to me that this unusual price volatility may be due to JPMorgan and the other big commercial silver shorts shaking the tree to flush out as much outside selling as possible so that these big silver shorts can buy. I can (and have) look dumb in the very short term, but it feels to me like we can move up sharply at any moment.

The more I contemplate the four month price decline since mid-July in silver (and other commodities) increasingly it looks like the setup of all setups. There was an almost unmistakable deliberate intent to the decline and this has been proven out in the futures’ positioning changes. While unexpected by me, the recent double-crossing by the big silver shorts of the smaller raptors fits in perfectly with the mother of all setups thesis. And while the big traders on the COMEX can bomb the price at will in the short term, it’s hard for me to see what category of traders’ remains that can sell significant quantities of futures contracts. Instead, all I see are the many categories of potential big buyers. - Silver analyst Ted Butler: 19 November 2014

Regarding Wednesday's price action in both gold and silver, I certainly can't add anything to what Ted had to say in his quote above from his mid-week commentary to his paying subscribers yesterday---and as I said in the first part of today's column, the gross and net volumes in both metals were over the moon.

It's just too bad that none of this data will be in tomorrow's Commitment of Traders Report.

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

As I type this paragraph, the London open is less than ten minutes away.  Gold got sold down five bucks or so in early trading in the Far East on their Thursday morning, but began to rally off off its low starting at 1:30 p.m. Hong Kong time. The same price pattern is evident in silver and platinum.  Palladium was mostly unaffected.  Not surprisingly, silver is the only precious metal that's currently down from its Wednesday's close in New York.

Net gold volume is already a very chunky 40,000 contracts, with very few roll-overs so, like the last few days, most of this volume is of the HFT variety.  Silver's net volume is 6,000 contracts---and the roll-over activity is slightly higher, but only just.

The dollar index, which hadn't been doing much for most of the early Far East trading session, went into rally mode starting at precisely 2:30 p.m. in Hong Kong---and is currently up 12 basis points.

There are six business days left [including today] for all traders, except those standing for delivery, to be out out of the December contract.  Those that aren't standing for delivery have to be out by the end of the Comex trading session next Thursday.  All the large traders have to have rolled or sold their December contracts by the end of Comex trading on Wednesday---and everyone else has to be out the following day.  First Day Notice for the December delivery month will be posted on the CME's website late Friday evening EST.

And as I hit the send button on today's column at 5:21 a.m. EST, I note that the rally in gold is continuing---and it will interesting to see if the price suffers the same fate it did the last two times it attempted to break above the $1,200 spot price mark---if it's allowed to get close to that price, that is.  The other three precious metals are in rally mode as well---and nicely above their Wednesday closing prices in New York.

Here's the Kitco gold chart as of 5:17 a.m. EST

Net gold volume is around 55,000 contracts, which is a lot---and roll-over activity has increased by quite a bit.  Silver's net volume is now up to 9,500 contracts, also with decent roll-over action.  Even though the rallies are being allowed to progress, the volume associated with them is higher than I'd like to see.

The dollar index has been all over the map---and is continuing its rather frantic choppy trading action that it went through during the Wednesday session.  At the moment its up 17 basis points.

December is the biggest delivery month of the year for both gold and silver---and with JPMorgan et al appearing to be heading for exits in both these metals, all the ingredients are in place for a potential wild and woolly trading week dead ahead.  If the last two Friday trading sessions, plus yesterday's shenanigans are any indication, I won't have a shortage of things to talk about for the remainder of the month.

That's all I have for today, which is more than enough---and I'll see you here tomorrow.

Ed Steer

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Thu, 20 Nov 2014 06:59:00 +0000
<![CDATA[Lawrence Williams: Gold Bounces Back Above $1,200—Will It Jump Higher?]]> http://www.caseyresearch.com/gsd/edition/lawrence-williams-gold-bounces-back-above-1200-will-it-jump-higher/ http://www.caseyresearch.com/gsd/edition/lawrence-williams-gold-bounces-back-above-1200-will-it-jump-higher/#When:06:30:00Z "That hope sort of went out the window"

¤ Yesterday In Gold & Silver

The gold price didn't do a lot during most of the Far East trading session, but starting about thirty minutes before the London open---3:30 p.m. Hong Kong time---a rally developed in it and the other three precious metals as well.  The high tick came minutes after 5:10 a.m. EST, as I was watching the chart as it happened---and as I said in The Wrap section of yesterday's column, HFT volume was immense---as JPMorgan et al threw 'whatever it took' at it to prevent the price from exploding to the upside, which is precisely what it was attempting to do, as it had all the hallmarks of a 'no ask' market.

'Da boyz' had the price more or less back in the box---and back below $1,200 spot---by the London p.m. gold fix, but the price chopped quietly higher from that point right into the close of electronic trading at 5:15 p.m. EST.

The low and high ticks were reported by the CME Group as $1,182.70 and $1,204.10 in the December contract.

Gold closed yesterday at $1,197.50 spot, up only $10.30 from Monday's close.  Net volume was only 137,000 contract, but at least 40 percent of that occurred before the London a.m. gold fix.

Here's the 10-minute tick gold chart courtesy of Brad Robertson.  You can see the volume blow out when the rally started 30 minutes before London open, along with the big volume spike that occurred either at, or just before the London a.m. gold 'fix' was in when the price spike got capped.  Add two hours for EST.  The 'click to enlarge' feature helps here.

After getting hit for about two bits in the first three hours of trading in the Far East on their Tuesday morning, the silver price rallied back to almost unchanged before it took off thirty minutes before the London open.  The not-for-profit sellers had the price back to unchanged by 1 p.m. GMT---and twenty minutes later 'da boyz' in New York finished the job once COMEX trading began.  After that, the silver price didn't do a lot.

The low and high ticks in silver were reported as $15.97 and $16.40 in the December contract.

Silver finished the Tuesday session at $16.19 spot, up only 4.5 cents from Monday.  Net volume was only 30,500 contracts but, once again, 40 percent of that occurred before the London a.m. gold fix when the rally in silver met the same fate as gold's.

It was more or less the same chart pattern for platinum as it was for gold, with the rally back in the box by the time the London p.m. fix rolled around.  Platinum closed up 7 bucks.

After not doing much for most of the Far East trading session, palladium also rallied starting thirty minutes before the London open---and despite a minor sell-off, continued to inch higher as the trading day progressed.  However, there was obviously a "Do Not Pass $775 Spot" sign up, as the price was not allowed to break above that level.  Palladium was only allowed to close up 4 dollars.

The dollar index closed in New York late on Monday afternoon at 87.995--which turned to be its high tick for Monday, because it dropped 20 basis points in the first hour of trading in the Tuesday session.  It began to head south with more authority staring about 40 minutes before London opened---and that's when the rallies began in all four precious metals.  The slide ended about 10:10 a.m. GMT---and that's the moment that the precious metals topped out.  After that the index attempted to rally a few times, with no success---and when all was said and done, it closed at 87.61---down about 39 basis points on the day.

The gold stocks gapped up a couple of percent at the open---and then chopped steadily higher for the remainder of the day---as the HUI closed close to its high tick, up 5.33%.  We'll take it.

It was more or less the same story for the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed up 4.81%.

Here's the long-term Silver 7 index---and you can see that despite the decent gains of the last three trading sessions, we've barely crawled off the bottom.

The CME Daily Delivery Report drew a blank for the second day in a row.  There were only copper deliveries posted yesterday.

The CME Preliminary Report for the Tuesday trading session showed that November open interest in gold dropped by one contract down to 20 contracts---and once again silver's November o.i. was unchanged at 88 contracts outstanding.

There were no reported changes in GLD---but there was a big deposit made in SLV yesterday, as an authorized participant added a chunky 2,395,515 troy ounces of the stuff.  That's more than one day's world silver production, so it's a good bet that it's another pile of good delivery bars with some decent Air Miles/Frequent Flyer points attached to them.

There was another sales report from the U.S. Mint.  They sold 500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 298,500 silver eagles.

There was no in/out activity in gold worth mentioning at the COMEX-approved depositories on Monday.  But, as is almost always the case, the story was different in silver, as 1,018,220 troy ounces were received---and 728,24 troy ounces were shipped off to parts unknown.  The link to that action is here.

I have have a decent number of stories today---and I hope you find some in the list below that interest you.

¤ Critical Reads

U.S. Pension Insurer Ran Record $62B Deficit in 2014

The deficit run up by the federal agency that insures pensions for about 41 million Americans has nearly doubled, to $62 billion. And the agency says that without changes, its program for pension plans covering 10 million of those workers will be insolvent within 10 to 15 years.

It was the widest deficit in the 40-year history of the Pension Benefit Guaranty Corp., which has now run shortfalls for 12 straight years. The gap grew wider in recent years because the weak economy triggered more corporate bankruptcies and failed pension plans. If the trend continues, the agency could need an infusion of taxpayer funds to pay retirees, who are guaranteed their pensions by law.

The PBGC said Monday that the increased deficit was due to worsening finances of some multi-employer pension plans, which are pension agreements between labor unions and a group of companies, usually in the same industry. The $62 billion deficit reported for the year ended Sept. 30 compared with $36 billion in the previous fiscal year.

This AP story showed up on the abcnews.go.com Internet site at 7:19 p.m. EST on Monday---and by the time that West Virginia reader Elliot Simon sent it my way, my Tuesday column was all full up, so here it is now.

Flash Boys Raise Volatility in Wild New Treasury Market

In a flash, the bond market went wild.

What began on Oct. 15 as another day in the U.S. Treasury market suddenly turned into the biggest yield fluctuations in a quarter century, leaving investors worrying there will be turbulence ahead.

The episode exposed a collision of forces -- the rise of high-frequency trading and the decline of Wall Street dealers -- that are reshaping the world’s biggest and most important bond market. Money managers say the $12.4 trillion Treasury market is becoming less liquid, meaning securities can no longer be traded as quickly and easily as they used to be, thanks in part to the Federal Reserve’s bond-buying program.

“The way the market is set up right now, we’ll see instances like we did on that day,” said Michael Lorizio, senior trader at Boston-based Manulife Asset Management US LLC, which oversees $281 billion. “There’s going to be a learning curve as to how to handle that.”

This longish Bloomberg article put in an appearance on their Internet site at 5:45 p.m. Denver time Tuesday afternoon---and it's the second contribution in a row from Elliot Simon.

Buffalo is About to Get Slammed With 6 Feet of Snow and the Photos are Already Wild

Starting early Tuesday morning, 3 feet of snow blanketed parts of western New York, especially the city of Buffalo — and the deluge likely won't stop for days. 

The National Weather Service has issued a lake effect snow warning for Genesee, Erie, and Wyoming counties until 1 p.m. ET on Wednesday. Snowfall rates could hit 5 inches per hour, bringing a potential total of 6 feet of snow, the service reports.

Lake effect snow occurs when a cold front moves over a large body of warmer water, creating unstable temperatures in the atmosphere. As a result, clouds form, suck up water, and develop into heavy snow as they move downwind. 

Whiteout conditions forced the closure of I-90, a major highway in the area, in both directions. Going forward, visibility could reach zero at times, according to the National Weather Service.

This incredible photo-essay appeared on the businessinsider.com Internet site yesterday at 10:39 a.m. EST---and the pictures are definitely worth the trip.  I thank Roy Stephens for his first offering of the day.

Jim Rickards: Four Bloomberg Interviews

1. Does the G-20 Communique Offer Enough Specifics? [2:32 minutes]  2. Why M&A Activity Has Picked Up This Month  [7:04 minutes]  3. Japan Has Been in a Depression Since 1990 [6:47 minutes]  4. Oil Prices Plunge: How Likely Is Action From OPEC? [3:57 minutes]

I must admit that I haven't had time to watch all of them---and I thank reader Harold Jacobsen for providing all these Bloomberg video clips.

International Man: What If Silicon Valley Moved to Puerto Rico?

The tax benefits of Puerto Rican residency gained some attention and notoriety when hedge fund billionaire John Paulson went to Puerto Rico to “kick the tires.”

He did not become a Puerto Rican resident (not yet, at least), but ended up buying a resort there instead. My theory is that John Paulson can’t move anywhere without attracting adverse media attention. The media would declare that Paulson’s purchase of a Big Gulp at Seven Eleven as tax motivated.

Puerto Rico has long used corporate tax incentives to attract many large American multinational companies. Both Apple and Microsoft can attribute a great deal of their tax benefits and success to Puerto Rico. Many pharmaceutical companies have Puerto Rican operations.

The Puerto Rican government—not lacking in creativity—passed a series of tax bills in 2012 to create economic incentives for Americans to move and start businesses in Puerto Rico. Namely, they eliminated taxation on dividends, interest, and capital gains as well as reduced corporate taxes to just 4%.

This very interesting commentary appeared on the internationalman.com Internet site the other day.

ECB entering 'very dangerous territory' warns S&P

The European Central Bank’s plans for €1 trillion of monetary stimulus is fraught with risk and is likely to fail without full-blown bond purchases, Standard & Poor’s has warned.

The agency said the ECB’s blitz of ultra-cheap loans to banks (TLTROs) cannot generate more than €40bn of net stimulus once old loans are repaid, given regulatory curbs imposed on lenders.

Jean-Michel Six, the agency’s chief European economist, said ‘doves’ on the ECB’s governing council know that the loan plan is unworkable but are going through the motions in order to persuade German-led ‘hawks’ that all conventional measures have been exhausted, even if this means a debilitating delay.

“Risks of a triple-dip recession have increased,” said Mr Six. "The ECB has one last arrow and that is quantitative easing of €1 trillion, needed to restore the M3 money supply to trend growth."

This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site at 5:55 p.m. GTM on Tuesday afternoon---and it's courtesy of South African reader B.V.

France will not sign multi-billion transatlantic trade deal with U.S. in 2015

The French government will not support the Transatlantic Trade and Investment Partnership (TTIP) between the E.U. and U.S. as long as a controversial stipulation is included.

France, like the U.K. and Germany, will block the trade deal altogether if the mechanism of investor-to-state dispute settlement (ISDS) is included; EurActiv France reported.

The clause appears in most free trade agreements, and would leave France defenseless against foreign companies taking legal action against it if laws and legislation stunt profits.

"France did not want the ISDS to be included in the negotiation mandate," France's Secretary of State for Foreign Trade, Matthias Fekl told the French Senate. "We have to preserve the right of the state to set and apply its own standards, to maintain the impartiality of the justice system and to allow the people of France, and the world, to assert their values," he added.

This story showed up on the Russia Today website at 1:00 p.m. Moscow time on their Tuesday afternoon---and it's courtesy of Roy Stephens.

Merkel Issues Rebuke to Russia, Setting Caution Aside

Tit-for-tat expulsions of diplomats. Russian naval ships showing up as world leaders meet in Australia. Chancellor Angela Merkel of Germany telling Russia sternly to play by 21st-century rules — and President Vladimir V. Putin practically spitting fury over Western reaction to his annexation of Crimea.

As relations between Russia and the West increasingly resemble the bygone days of the Cold War, Ms. Merkel abandoned her traditionally cautious tone on Monday, castigating Russia for its actions in Ukraine, for intimidating sovereign states in Eastern Europe and for threatening to spread conflict more broadly across Europe.

“The Ukraine crisis is most likely not just a regional problem,” Ms. Merkel said in a speech at the Lowy Institute for International Policy in Sydney, Australia. “In this case, we see it affects us all.”

This propaganda piece showed up on The New York Times website on Monday sometime---and I'd be very careful about reading too much into it, as this paper, along with the WSJ and Washington Post are mouthpieces for the U.S. government.  I thank Phil Barlett for being the first reader through the door with this story yesterday.

Mistaken identity: French plane entered Swedish air space – not Russian as reported

The Swedish military has confirmed a “Russian” aircraft that entered Swedish airspace on Saturday was actually French. The Expressen newspaper had falsely reported a Russian plane was "a couple of kilometers on the wrong side of the border.”

The military plane actually turned out to be from France and Jesper Tengroth, a press officer for the Swedish military said they are now going to investigate what the plane was actually doing there. Speaking to The Local news website, he was unable to give any further details about the French aircraft and added The Expressen publication would, “have to take responsibility for their sources.”

The French Embassy in Stockholm says they are currently investigating the air violation. “I do not have any information right now. We are in contact with Paris to understand what is happening,” said Lionel Fabre, who is the embassy’s press officer, as reported by Expressen.

However, Janzen made no mention of the mix-up on his Twitter page, preferring to continue condemning Moscow for testing Europe’s air defenses.

Stories such as this will never be allowed to appear in the Western press.  This one appeared on the Russia Today website at 6:30 p.m. Moscow time on their Monday evening, which was 10:30 a.m. EST.  It's courtesy of reader M.A.

Ukraine Shows Signs of Accepting Novorussia As an Independent Neighbor

This is an interesting article that forcefully conveys the fact that Kyiv [Kiev] continues to raise the alarm about existing or potential Russian or Novorossiyan bellicosity and to proclaim its readiness to fight a renewed full-scale war.

However, with Ukraine disowning retirees in Donbass and contemplating trade deals with the rebel leadership there are increasing signs that this combative attitude is really for internal consumption, and that Kyiv is actually beginning to gradually adjust to the reality of Novorossiya outside its sovereignty.

This interesting 3-page article was posted on the russia-insider.com Internet site early Tuesday morning sometime---and I thank Roy Stephens for sending it.

Pepe Escobar Explains Ukrainian Economics in 1 Minute

Kiev’s foreign reserves plunged last month by a whopping 23.2 per cent to a paltry $12.6 billion.  

By the end of the year it will be even messier.

Kiev’s gotta pay a $3.1 billion gas bill to Gazprom, or else…  

The central bank will have to sell more foreign currency to support the hryvnia. And there are MORE hefty gas bills as General Winter advances.

This tiny absolute must read commentary by Pepe showed up on the russia-insider.com Internet site on Monday sometime---and it's courtesy of reader B.V.

Putin says United States will never 'subdue' Russia

The United States wants to subdue Moscow, but will never succeed, Russian President Vladimir Putin said on Tuesday.

"They do not want to humiliate us, they want to subdue us, solve their problems at our expense," Putin said at the end of a four-hour meeting with his core support group, the People's Front.

"No one in history ever managed to achieve this with Russia, and no one ever will," he said, triggering a wave of applause.

Putin's tough talk reflected the strain in ties between Moscow and Washington, who are at loggerheads over the crisis in Ukraine, where the West has accused Russia of promoting and arming a separatist rebellion.

This Reuters news item, filed from Moscow, showed up on their website at 12:07 p.m. EST on Tuesday---and it's courtesy of Roy Stephens.  Roy also sent along the Russia Today version of the same news item headlined "Putin: ‘U.S. wants to subdue Russia, but no one did or ever will’"---and I urge you to read them both for comparison purposes---and then decide which one is the most believable.

Poland: E.U. and NATO pressure France into giving up on Mistral delivery to Russia

The European Union and NATO members are trying to persuade France to stop the delivery of Mistral helicopter carriers to Russia, Poland's Deputy Prime Minister and the head of Defense Department Tomasz Siemoniak said Tuesday. He was at the scheduled meeting of the EU defense ministers.

He said the issue was discussed on the sidelines of the talks in Brussels. “The pressure on France is strong. I am confident that France will make a wise and responsible decision, knowing that it is a NATO member.”

He added that Poland is against France's selling high-technology military equipment to Russia.

In his opinion, France is already close to a decision on Mistral delivery to Russia.

This news story showed up on the itar-tass.com Internet site at 8:16 p.m. Europe time yesterday evening---and I thank Roy Stephens for sharing it.

Russian ruble recovering against U.S. dollar as oil heads back to $80

The Russian currency started to bounce back in Tuesday trading, as oil prices edged closer to $80 per barrel, an important benchmark that was crossed last week.

The US dollar lost 28 kopecks to 46.82 rubles at 10:55 Moscow time (07:55 GMT) going below 47 rubles for the first time since last week. The Central Bank of Russia also cut its official rate for the American currency for Wednesday, dropping it by 35.32 kopecks to 46.98.

The price of oil is also recovering, with Brent December futures climbing above $79 per barrel heading to an $80 per barrel threshold.

"After the expiration of December contracts, a traditional rebound has started. High chances remain for a full-fledged [upward] correction. The next growth target is in the range of $85.5-86.5 per barrel for Brent crude," he said.

This news item was posted on the Russia Today website at 11:28 a.m. Moscow time on their Tuesday morning---and once again I thank Roy Stephens for finding it for us.

Russia's Rosneft Invites China to Participate in Joint Arctic Projects

Russia’s oil giant Rosneft has invited Chinese companies to participate in joint energy projects in the Arctic, Russian Resource Minister Sergei Donskoi said Tuesday.

“The Chinese have received an offer and are looking at participation in these projects [in the Arctic]. We’re talking about with Rosneft,” the minister said.

Russian and Chinese relations have been actively developed over the past few months.

Earlier in November, Russian President Vladimir Putin stated that increasing cooperation with China, including in the energy sector, is one of Russia's top foreign policy priorities.

This short news item put in an appearance on the sputnik.com Internet site at 4:50 p.m. Moscow time on their Tuesday afternoon---and I thank reader M.A. for bringing it to our attention.

Japan Goes Full Helicopter-Ben: Prints "Free Gift-Cards" to Spark Consumption

Since Ben Bernanke reminded the world of the existence of government printing-presses, echoed Milton Friedman's "helicopter drop" solution to fighting deflation, and decried Japan for not being as insane as it could be... it has only been a matter of time before some global central bank decided that the dropping of cash onto the populace was the key to economic recovery.

Having blown their wad on QQE (and been left with a triple-dip recession), it appears Japan has reached that limit.

As Japan's News47 reports, Prime Minister Shinzo Abe has instructed his cabinet to develop economic measures such as handing out 'gift certificates' to the poor to "support personal consumption directly."

This Zero Hedge article showed up on their website at 8:55 p.m. EST on Monday evening---and I found it embedded in yesterday's edition of the King Report.

Japan's 'Abenomics' can survive quadruple-dip recession

Abenomics is alive and well. Japan’s crash into its fourth recession since 2008 is a nasty surprise for premier Shinzo Abe but it tells us almost nothing about the central thrust of his reflation blitz.

The mini-slump is chiefly due to a one-off fiscal shock in April. Mr Abe defied warnings from Keynesian critics and unwisely stuck to plans drawn up by a previous (DPJ) government to raise the consumption tax from 5pc to 8pc.

The essence of Abenomics is monetary reflation a l’outrance to lift the country out of deflation after two Lost Decades. The unstated purpose of this “First Arrow” is to lower real interest rates and raise the growth of nominal GDP to 5pc, deemed the minimum necessary to stop Japan’s debt trajectory from spiralling out of control.

This is a formidable task and may ultimately fail. Public debt is already 245pc of GDP. Debt payments are 43pc of fiscal revenues. The population is expected to fall to from 127m to 87m by 2060. Given the grim mathematics of this, the inertia of the pre-Abe era was inexcusable.

Ambrose Evans-Pritchard, who never met a monetary inflation he didn't like, tries to put lipstick on the Abenomics pig for his New World Order masters---and I'll leave it up to you, dear reader, to determine whether he succeeds or not.  I gave it a big thumbs down.  This article was posted on The Telegraph's website at 8:27 p.m. Monday evening GMT---and I thank Roy Stephens for finding it for us.

David Stockman: Why Japan’s Money Printing Madness Matters

This is getting hard to believe. The announcement that Japan has plunged into a triple dip recession should have been lights out for Abenomics. But, no, its madman prime minister has now called a snap election to enlist more public support for his campaign to destroy what remains of Japan’s economy.

And what’s worse, he’s not likely to be stopped by the electorate or even the leadership of Japan Inc, which presumably should know better. Here’s what Japan leading brokerage had to say about the “unexpected” 1.6% drop in Q3 GDP—- compared to the consensus expectation of a 2.2% gain and after the upward revised shrinkage of 7.3% in Q2.

"We think that the economy is gradually improving,” said Tomo Kinoshita, an economist at Nomura Securities. “There’s no reason to be pessimistic about the economy going forward.

Really? How in the world can an economist perched at the epicenter of Japan Inc. think that its economy is improving when Japan’s constant dollar GDP has now fallen back to pre-Abenomics levels; and, in fact, is no higher than it was in late 2007 prior to the “financial crisis”? Indeed, aside from the Q1 pull-forward of spending to beat the consumption tax increase, Japan’s economy has remained stranded on the flat-line it attained after world trade recovered from its 2008-2009 plunge.

David rips Prime Minister Abe a new one in this very long chart-studded commentary that was posted on his website yesterday.  It's definitely worth reading, but only to the point where your eyes start to glaze over.  It's the last offering of the day from Roy Stephens, for which I thank him.

Mercedes Vision G-Code concept is one big solar panel

Mercedes-Benz is in the midst of overhauling its SUV and crossover lineup in both makeup and name, with a new GLC model slated to replace the GLK, a GLE to replace the GL and even a new G-Class to cap it all off. But it's not just the production utilities which Benz has been working on.

Presented at the opening of the German automaker's new R&D center in Beijing, this new Vision G-Code concept takes the form of a Sports Utility Coupe that – at 161 inches long – is even shorter than the GLA that's currently Mercedes' smallest crossover. But despite its compact form, the G-Code is packed with cutting-edge technology.

For one, it uses multi-voltaic silver paint that transforms the body into one continuous solar panel. It fuels the electric portion of the otherwise unspecified hybrid power train that offers through-the-road all-wheel drive and the option of pure electric mobility. There's even a holographic grille at the front that indicates what mode the vehicle is in, similar to what we saw recently on Mercedes' Future Truck 2025 concept. The grille is flanked by LED headlights, with another strip of LEDs around back and tiny cameras that pop out of the hidden a-pillars to act as rear view mirrors (this is a concept, after all).

This interesting article put in an appearance on the autoblog.com Internet site back on November 3---and I thank Toronto reader 'Michael G' for digging it up for us.

Council to lobby central banks to adopt platinum

South Africa's platinum producers Anglo American Platinum, Lonmin and Impala Platinum have formed a council that will seek to boost investment demand for the metal including lobbying governments to have it installed as a reserve asset.

Paul Wilson, the newly appointed CEO of the World Platinum Investment Council said the organisation also hoped to capitalise on the growth of platinum demand in China by having jewellery owners - who consume net 1.6 million ounces of the metal or 70% of the metal's jewellery market - consider platinum as an investment asset.

"There is a long term desire at the council to have platinum listed as a reserve currency," said Wilson in a telephonic interview today. "I can’t see why they [the South African Reserve Bank] can’t hold it in the same way as it holds gold," he said.

As Chris Powell said in his preamble to a similar story in the Financial Times yesterday---"Maybe gold miners will figure it out for their own metal eventually as well."  Of course the platinum and palladium producers are in the same boat as the silver, gold and copper miners---held hostage by the paper games of JPMorgan et al in the COMEX futures market.  This article appeared on the miningmx.com Internet site at 5:00 p.m. SAST yesterday afternoon---and it's worth reading.

Ukraine Admits Its Gold is Gone: "There is Almost No Gold Left in the Central Bank Vault"

Back in March, at a time when the IMF reported that Ukraine's official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tonnes or 8% of reserves.

Notably, under the previous "hated" president, Ukraine gold's reserves had constantly increased hitting a record high just before the presidential coup we reported of a strange incident that took place just after the Ukraine presidential coup, namely that according to at least one source, "in a mysterious operation under the cover of night, Ukraine's gold reserves were promptly loaded onto an unmarked plane, which subsequently took the gold to the U.S."

Needless to say there was no official confirmation of any of this taking place, and in fact our report, in which we mused if the "price of Ukraine's liberation" was the handover of its gold to the Fed at a time when Germany was actively seeking to repatriate its own physical gold located at the bedrock of the NY Fed, led to the usual mainstream media mockery.

Until now.

This interesting---but not entirely surprising news item appeared on the Zero Hedge website at 7:47 p.m. EST yesterday evening---and I thank South African reader B.V. for his last contribution to today's column.

Jim Rickards: Measuring the Islamic State's Ability to Mint Money

West Shore Group's Jim Rickards discusses the finances of the Islamic State militant group with Bloomberg's Matt Miller on "Street Smart."

This 4:54 minute video clip showed up on the Bloomberg website on Monday sometime and, as usual, I thank reader Harold Jacobsen for bringing it to my attention---and now to yours.  It's worth watching.

Lawrence Williams: Gold bounces back above $1,200 – will it jump higher?

Gold bounced back above $1,200 this morning in London, but before one can be sure that this is the start of the long-expected recovery there could yet be teeth in the bear. The big money playing the futures markets with paper gold can still exert ultimate control over where the price is headed short term and if it suits them there could yet be another sharp price drop to try and drive out any remaining weak gold holders.

But medium term it may be that options are becoming more and more limited for keeping the market depressed. Gold continues to flow from West to East with the big recovery in Indian demand coupled with continuing high levels of withdrawals from the Shanghai Gold Exchange as the key elements in this. Although whether Indian demand has recovered to overtake China’s over the past two quarters as World Gold Council figures might suggest, and which has been reported as fact by much of the media, given SGE withdrawal figures have been running at such high levels of late we think is not a true picture of the real situation, but in combination India and China are taking in gold at back to peak levels.

Demand is also seen as high in a number of other countries in Europe, the Middle East and elsewhere in Asia, while Russia and some of the old FSU countries are adding to their gold reserves thus taking even more metal off the markets. It is hard to see where all this volume of gold is coming from as it certainly substantially exceeds new global gold output.

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

¤ The Funnies

¤ The Wrap

But more than ever, the current setup brings an old theme of mine directly into the crosshairs. To the point of redundancy, I’ve written over the years that the speed and extent of any silver rally would be determined by whether JPMorgan and the other seven big concentrated shorts added to short positions for the purpose of capping the price of silver. The events of the past two weeks bring that premise into sharper focus than ever before. With an assured reduction of potential raptor long liquidation, if JPMorgan and the other big concentrated shorts don’t add significant new short positions on the next silver rally (possibly begun on Friday) silver will fly like a rocket to the moon.

In the event these big crooked commercial shorts do add big numbers of new silver shorts, this must be accepted as prima facie evidence of manipulation presented in advance. One thing for sure, with the cost of primary silver production several dollars above the current price, it is not economically conceivable that any new short selling by the 'Big 8' could possibly be for legitimate hedging purposes below $20. After all, no producer looks to lock in a loss when hedging and that means any commercial shorting below $20 can’t be legitimate selling. Maybe there is some grey area ahead, but it looks to me like a case of black and white – either we explode if the big commercials don’t add new shorts or the price gets capped illegally if the big commercial shorts do add new shorts. - Silver analyst Ted Butler: 15 November 2014

Well, I was hoping for no upside price action yesterday in order that I would get unfettered view of what happened during the bifurcated trading day last Friday, when this Friday's Commitment of Traders Report was posted.  But with the big blow out---and subsequent price capping---of the rally in both gold and silver in the three hours prior to the London a.m. gold fix yesterday morning, that hope sort of went out the window, as yesterday at the close of COMEX trading was the cut-off for Friday's COT Report.

Make no mistake, dear reader, if JPMorgan et al hadn't stepped into the 'no ask' market in gold like they did, we would be looking at precious metal prices at the moment that would make your eyes water.  I don't call these guys 'sellers of last resort' without good reason---and we saw it again in spades on Tuesday, especially in gold.

Here are the 6-month gold and silver charts with yesterday's data in place.  The gold price got stopped just short of its 50-day moving average---and silver wasn't allowed to go anywhere.

And as I type this paragraph, the London open is a bit over 20 minutes away.  All four precious metals are down from their Tuesday closes in New York---albeit not by much in the case of palladium.   With no fires to put out in Far East trading on their Wednesday morning, net gold volume is much more subdued---around 20,000 contracts, with a decent amount of roll-over activity, at least compared to Tuesday at this time.  Net volume in silver is very low, around 2,500 contracts---and a big chunk of the gross volume is roll-overs.  Everything looks 'normal' at the moment---whatever passes for normal these days.  The dollar index isn't doing much at the moment, but it's up 14 basis points from the New York close yesterday.

I was somewhat surprised to see such a large deposit in SLV yesterday, as physical silver in that quantity is pretty hard to come by these days---and IF, and it's pretty big if, the silver rally is allowed to continue, then SLV will require even more silver as investors pile back into that ETF.  At that point JPMorgan will be forced to short the shares in lieu of depositing physical metal---and one has to wonder what will happen from that point onwards, because all the silver ETFs will be looking for metal at that stage.

It seems like an impossible situation with no viable solution that I can see---and what the end game will be for all the silver ETFs when physical metal is no longer available at any price, will be a sight to behold.  One way or another, that day is coming.

And as I prepare to sent this off to Stowe, Vermont at 5:30 a.m. EST, I note that three of the four precious metals had tiny rallies at the London open---and the rally in gold was stopped in its tracks just under the $1,200 spot price mark.  All four precious metals are currently trading at, or a hair above their closing prices in New York on Tuesday.

Gold's net volume is at 37,000 contracts---and silver's net volume is 5,600 contracts.  About 15 percent of gold's gross volume is roll-overs out of the December contract, but in silver it's closer to 25 percent.  The dollar index is up only 10 basis points at the moment.

It's hard to tell what the precious metals will do for the rest of the Wednesday trading session.  I know what they'd like to do, but it's painfully obvious from yesterday---and so far today---that the they aren't being allowed to get far, at least for the moment.

And as I hit the send button, I see that gold has popped above the $1,200 spot price mark, so nothing will surprise me when I check the charts after I roll out of bed later this morning.

Here's the Kitco gold chart as of 5:30 a.m. EST---

But before heading in that direction, I'd like to mention the following one more time---and that's that Nick Giambruno, the Senior Editor over at the InternationalMan.com Internet site is launching a brand new publication entitled "CRISIS SPECULATOR"---and you can read all about it by clicking here.

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

Ed Steer

]]>
Wed, 19 Nov 2014 06:30:00 +0000
<![CDATA[Koos Jansen: Who’s Feeding China’s Gold Hunger?]]> http://www.caseyresearch.com/gsd/edition/koos-jansen-whos-feeding-chinas-gold-hunger/ http://www.caseyresearch.com/gsd/edition/koos-jansen-whos-feeding-chinas-gold-hunger/#When:06:35:00Z "Monday was a nothing sort of day from a price perspective"

¤ Yesterday In Gold & Silver

As has been the case for a while now, the gold price got sold down the moment that trading began in New York on Sunday evening.  The rally that began at 9 a.m. Hong Kong time got dealt with in the usual manner as it headed towards the $1,200 spot price mark with a certain amount of vengeance.  After that, the price didn't do much---or wasn't allowed to do much---you choose.

The high and lows ticks weren't worth looking up, but here they are anyway.  The high tick was $1,193.60 and the low tick was $1,180.80 in the December contract.

Gold finished the Monday session in the New York at $1,187.20 spot down $1.30 from Friday's close.  Gross volume was well over 200,000 contracts once again, but it all netted out to 159,000 contracts---and about 53,000 contracts of that amount was traded before the London open, which is an immense number, so I get the impression that JPMorgan et al had to throw a fair amount of paper at that little price spike in Hong Kong.

The silver price action was identical, complete with with the sell-off at the New York open, along with the 9 a.m. Hong Kong time price spike.  After that, the price got sold down about 20 cents in the two hours prior to the London open.  Then it traded virtually ruler flat for the remainder of the Monday session.

The high and low ticks were reported by the CME Group as $16.35 and $16.05 in the December contract

Silver closed yesterday at $16.145 spot, down 18 cents from Friday.  Net volume was huge once again at 47,500 contracts.  Silver's net volume going into the London open was very chunky as well, a bit over 10,000 contracts.

Platinum---and particularly palladium---also had price spikes at 9 a.m. Hong Kong time, but both were dealt with in the usual fashion.  Platinum was closed down 10 dollars---and palladium closed in the plus column to the tune of 5 dollars, but would have done infinitely better if left to its own devices.  The same can be said of the other three precious metals as well.  Here are the charts.

The dollar index closed at 87.55 late on Friday afternoon---and began to head lower the moment that trading began in New York on Sunday evening.  The low tick/'gentle hands' rescue came at 9 a.m. Hong Kong time---which was, not surprisingly, the high tick for the price spikes in the precious metals.  The rally that commenced from there was all done at, or shortly after, the London p.m. gold fix---and from there the index traded flat for the remainder of the day.  The index closed at 87.995---which was up 44 basis points from Friday's close.

The gold stocks opened down, but began to chop higher almost immediately---and were back in positive territory to stay by 1:15 p.m. EST, as the HUI closed up a respectable 1.92%.  I was happy to see this, as the HUI got crushed last Monday after its big gains on the previous Friday [Nov 7].  Let's hope that yesterday's price action is a harbinger of things to come.

Almost the same can be said of the silver equities, however they didn't do quite as well, but Nick Laird's Intraday Silver Sentiment Index still managed to close up 1.08% despite the fact that the metal itself, like gold, finished in the red.

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

The CME Preliminary Report for the Monday session showed that, after the two surprise sessions last Thursday and Friday, gold open interest is now back down to 19 contracts still open in the November delivery month.  Silver's o.i. fell one contract to 88 contracts.

Not surprisingly, there was a decent amount of gold added to GLD yesterday, as an authorized participant deposited 76,882 troy ounces yesterday.  And as of 5:13 p.m. EST yesterday afternoon, there were no reported changes in SLV.

True to its word, the U.S. Mint had some silver eagles to sell yesterday, as they reported sales of 1,012,000 of them.  How many more of the 2014 year they mint remains to be seen, but I would guess that it won't be a lot.  As Ted Butler said on the phone yesterday, they could have sold many millions more of them this year if they'd had the blanks and/or the production capacity.  Those that the public didn't buy would have been happily gobbled up by JPMorgan and their ilk.

There wasn't much movement in gold over at the Comex-approved depositories on Friday.  Only 9,645 troy ounces were reported received---and nothing was shipped out.  The receipt was at Canada's Scotiabank.  It was another big in/out movement day in silver, as 536,933 troy ounces were received---and 909,736 troy ounces were shipped off to parts unknown.  Only JPMorgan and HSBC USA weren't involved---and the link to that action is here.

Despite my best efforts, I have a boatload of stories for you today, so I'm more than happy to leave the final edit up to you.

¤ Critical Reads

The Great Paul Volcker Speaks—-Slams Today’s Central Banker Pretensions

Paul Volcker, the man who broke the back of inflation in the opening years of the 1980s, is a man at odds with what Federal Reserve policy making has become.

A 2% inflation target? Long-term, detailed forecasts of activity? Pledges to keep rates very low well into the future? For Mr. Volcker, who led the Fed from 1979 to 1987, these are all overly precise policy choices that promise more than any central bank can deliver. What’s worse, the policies that have come to define modern Fed policy can even be counterproductive, making central bank goals harder to achieve.

Mr. Volcker, 87, weighed in on monetary policy while participating at a conference held at the Federal Reserve Bank of Philadelphia on Thursday. The former central banker occupies a hallowed place in the institution’s history, having helmed the effort that decisively killed the high inflation that boiled out of the 1970s, albeit by way of creating a sharp economic downturn. His blunt-force approach to central bank policy making stands in sharp relief to the increasingly complex web of communications and tools that have come to define the Ben Bernanke and Janet Yellen eras of central bank leadership.

This commentary appeared on The Wall Street Journal website last Thursday---and I borrowed the headline from David Stockman's website.  I thank reader Dan Lazicki for today's first news item.  It's worth reading.

Jim Rickards: Beware the Money Illusion Coming to Destroy Your Wealth

A money illusion sounds like something a prestidigitator performs by pulling $100 bills from a hat shown to be empty moments before. In fact, money illusion is a longstanding concept in economics that has enormous significance for you if you’re a saver, investor or entrepreneur.

Money illusion is a trick, but it is not one performed on stage. It is a ruse performed by central banks that can distort the economy and destroy your wealth.

The money illusion is a tendency of individuals to confuse real and nominal prices. It boils down to the fact that people ignore inflation when deciding if they are better off. Examples are everywhere.

This longish, but very worthwhile essay appeared on the dailyreckoning.com Internet site last Thursday as well---and I thank Harold Jacobsen for sharing it with us.

'Obama is a lame duck': Gorbachev comments after G20

Former Soviet President Mikhail Gorbachev has called the US president a 'lame duck.' Commenting on the recent G20 summit in Australia, Gorbachev said he was disappointed in Obama and that he 'thought better' of the American leader.

"Obama is a lame duck. One must not finish the job in such a mediocre way. He just decided to throw accusations around. He will be of no avail any more, unfortunately. I've thought better of him," the former leader of the USSR told Rusnovosti radio.

Gorbachev, who is praised around the world as a great advocate of democracy, used the American term - meaning an elected official, approaching the end of his time in office - when talking about Obama's comments at the G20 summit.

This article appeared on the Russia Today website at 4:05 p.m. Moscow time on their Monday afternoon---and it's the first offering of the day from Roy Stephens.

Banking culture needs fundamental overhaul not fines, Mark Carney says

Mark Carney has warned bankers they should lose more of their pay in cases of wrongdoing – in addition to forfeiting bonuses – after a series of fines for bad conduct have failed to improve standards across the scandal-hit industry.

The Bank of England governor signalled a radical overhaul of the way bankers are paid as he told an audience in Singapore that repeated fines for scandals, such as manipulating Libor and last week’s £2.6bn penalties for rigging foreign exchange rates, were not enough to change behaviour.

New measures were needed to restore the public’s trust in the financial markets, Carney said, signalling that moves could include making bankers fund a bank’s fines out of their pay or potentially docking salaries.

How about sending bankers to jail for their crimes?  That would restore my confidence---but I noticed that Carney never mentioned the word in this article that appeared in The Guardian early yesterday evening GMT.  It's the first contribution of the day from South African reader B.V. [I note that when I was editing this column at 4:14 a.m. EST, the 'thought police' at The Guardian have provided a new headline:  It reads "Mark Carney: dock bankers' pay for misconduct"

British P.M. David Cameron: Red lights are flashing on the global economy

Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.

As I met world leaders at the G20 in Brisbane, the problems were plain to see. The eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too. Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down. Despite the progress in Bali, global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.

The British economy, by contrast, is growing. After the difficult decisions of recent years we are the fastest growing in the G7, with record numbers of new businesses, the largest ever annual fall in unemployment, and employment up 1.75 million in four years: more than in the rest of the EU put together. But the reality is, in our interconnected world, wider problems in the global economy pose a real risk to our recovery at home. We are already seeing that, with the impact of the eurozone slowdown on our manufacturing and our exports.

We cannot insulate ourselves completely, but we must do all we can to protect ourselves from a global downturn. Working through the agenda at the G20, it was clearer than ever how vital it is that we stick to our long-term plan at home and at the same time play our part in the international response to the global challenges on which our economic security also depends.

This commentary by British Prime Minister David Cameron, who has a keen grasp of the obvious, appeared on The Guardian website yesterday sometime---and I stole it from Mark O'Byrne's column over at the goldcore.com Internet site.

Russian Blue Chips Might Dump London En Masse, and Re-list in Hong Kong

With East-West relations at rock bottom, Russia's leading blue chip companies are toying with the idea of abandoning the London Stock Exchange as the long preferred venue for listing their shares, and moving to Hong Kong.

In the last month, state-owned oil and gas giants Rosneft and Gazprom, together with privately owned oil producer Lukoil, have all said they are thinking about delisting from the LSE and floating on the Hong Kong Stock Exchange instead and denominating their stocks in Asian currencies, according to comments made by Russia's Economic Development Ministry on November 8. 

"The largest Russian companies - Gazprom, Rosneft and Lukoil - are considering the Hong Kong Stock Exchange as a suitable trading floor to list their securities denominated in Asian currencies (the yuan, the Hong Kong and the Singaporean dollar)," the ministry said in a statement.

The banks are also talking the same game: Russia's state-owned de facto development bank Vnesheconombank says it may launch an affiliate in Hong Kong next year, while retail banking behemoth Sberbank and leading commercial bank Promsvyazbank are also considering opening branches in Hong Kong, the ministry said citing its head Alexei Ulyukayev.

This very interesting article showed up on the russia-insider.com Internet site  early on Monday morning Moscow time---and I thank reader B.V. for his second story in today's missive.

Belgium new sick man of Europe on debt-trap fears

Belgium is creeping back onto the Eurozone's danger list as economic woes spread deeper into the EMU-core, and protracted slump poisons debt dynamics.

Fitch Ratings has issued a downgrade alert, warning that the country's primary budget surplus is evaporating. It said public debt will reach 106.9pc of GDP next year.

New accounting rules known as ESA2010 have revealed that Belgium is poorer than previously thought, lifting the debt ratio by 3.3pc of GDP overnight. This is in stark contrast to the upgrade for Britain, Ireland, and Finland, all deemed to be richer and therefore less troubled by debt.

The agency placed Belgium on negative watch, deeming it ever further out of line among its AA-rated peers worldwide. The median debt ratio is 37pc. "Public debt dynamics have deteriorated owing to weaker real GDP growth and worse fiscal performance," it said.

Belgium has been in the toilet for years, with a junk bond rating masquerading as investment grade---and now the rating agencies have finally gotten around to pointing that out.  And since it's this bad on the surface then, like Italy and Spain, it must be butt-ass ugly under the hood.  This Ambrose Evans-Pritchard commentary showed up on The Telegraph's website at 7:02 p.m. GMT on Sunday evening---and it's the second story of the day from Roy Stephens.

Brussels Arraigns HSBC on Alleged Tax Fraud, Money Laundering: Reports

Belgian prosecutors have given notice of formal charges filed against the Swiss division of financial giant HSBC Holdings in connection with assisting high-income tax residents of Belgium evade taxation to the amount of billions euros, which is yet another criminal investigation into fraud and money-laundering against the Swiss banking giant.

Belgian judicial investigator Michel Claise has accused HSBC Private Bank SA (Suisse), a subsidiary of banking corporation HSBC Holdings of aiding several hundreds of its Antwerp-based clients, among whom are diamond dealers, to illicitly move their money from Swiss bank accounts to offshore holding companies, mostly in Panama and the British Virgin Islands. This capital offshoring was undertaken as a tax evasion scheme, the prosecution alleges, according to a Wall Street Journal report.

This capital flight came about in order to avoid taxes after an agreement to exchange information of bank accounts between the European Union and Switzerland was concluded. Prior to that agreement, many wealthy E.U. citizens holding money abroad enjoyed the absence of taxes on income generated by their Swiss bank deposits.

This story, filed from Moscow, was posted on the sputniknews.com Internet site at 4:36 p.m. local time yesterday afternoon---and it's the first contribution of the day from reader M.A.

'Austerity kills': Thousands rally against French President Hollande in Paris

Thousands of people took to the streets of Paris on Saturday to protest against austerity and condemn French President Francois Hollande for betraying his voters.

The demonstration gathered around 5,000 people, RT’s Ilya Petrenko reported from the French capital.

A variety of left-wing political forces occupied an entire street in downtown Paris for the rally.

The majority of those who came voted for socialist Francois Hollande two years ago and now say they were betrayed by the president they put in power.

This article put in an appearance on the Russia Today website on Saturday evening Moscow time---and it's the second story in a row from reader M.A.

Frankfurt Open for Yuan Clearing as Liquidity Rises

Frankfurt, which is seeking to corner a share of the burgeoning offshore yuan market, has set the ball rolling with the first clearing of transactions in the Chinese currency.

Bank of China Ltd., chosen by the People’s Bank of China in June to clear payments in the euro-area’s financial capital, has spent the last five months building the infrastructure to facilitate settlements before the official start of clearing today. Deutsche Bank AG, Commerzbank AG, DZ Bank AG and Landesbank Hessen-Thueringen Girozentrale have cleared transactions through the Frankfurt hub, according to Bernd Meist, its managing director.

Frankfurt became the first financial center in Europe to win the right to clear and settle payments in yuan when the Bundesbank and the People’s Bank of China signed a memorandum of understanding on March 28. The clearing bank makes it easier for German lenders and their clients to access the yuan and cut costs by making euros directly convertible with the Chinese currency without having to be changed into U.S. dollars first.

This Bloomberg article, filed from Frankfurt, appeared on their Internet site at 8:54 a.m. on Monday morning Denver time---and thank reader M.A. for sending it our way.

Italy's Grillo takes anti-euro campaign to Brussels

The leader of Italy's anti-establishment Five Star Movement, Beppe Grillo, has gone to the European Parliament (EP) to present his programme to get a referendum in Italy on leaving the euro "as soon as possible".

The comedian-turned-politician is aiming to collect 4m signatures by next spring.

He will then go to parliament in Rome, where many of his MPs now sit, and demand a referendum. If millions of Italians sign the petition, Prime Minister Matteo Renzi won't be able to simply brush this off.

Mr Grillo, much like UKIP leader Nigel Farage in Britain, has fundamentally changed the Italian political landscape.

This story was posted on the bbc.com Internet site at 4:43 a.m. EST last Thursday---and it's another article courtesy of reader B.V.

Ukraine scraps human rights treaty for rebel areas, cuts services, freezes banks

Kiev has suspended the protection of human rights and ordered the withdrawal of its institutions from areas controlled by local militia in the nation's east. Rebels have branded the decree, which hits the population on winter’s eve, an ‘act of genocide.'

The move was prepared by the Ukrainian National Security and Defense Council last week and enacted by a presidential decree signed on Friday. It has yet to be ratified by the newly-elected parliament, but the decree explicitly says that this procedure must be expedited – so there is little doubt that the new governing coalition will adopt it next week.

Arguably the most controversial part of the decree is the suspension of the European Convention on Human Rights in rebel-held areas. The convention, which guarantees basic human rights and fundamental freedoms in Europe, has a provision which allows some of its articles to be derogated by a signatory “in time of war or other public emergency threatening the life of the nation.”

With moves such as this one, Kiev seems to be begging Russia to take over the Donbass region---and with this turn of events, it's hard not to blame them if they did.  This article appeared on the Russia Today Internet site just after midnight Moscow time on their Sunday morning---and it's courtesy of reader M.A. once again.

Putin: Economic blockade of East Ukraine a ‘big mistake’

Ukraine’s decision to sever economic ties with rebel-held areas and stop funding local public services is a big mistake which does not help the locals gain trust in Kiev, Russian President Vladimir Putin told journalists at the G20 summit.

“I don’t understand why Kiev authorities are cutting off those territories with their own hands. Well one can understand – to save money. But it’s not the time or the case to save money on,” he said.

Putin compared Kiev’s debacle with the Donetsk and Lugansk regions to Russia’s own armed conflict in the Chechen Republic that erupted several times since the early 1990s and officially ended in April 2009. But even at the worst moments, Moscow did not stop paying pensions and other social benefits to the Chechen people, he said.

This Russia Today story dovetails with the article posted prior to this one---and it's also courtesy of reader M.A., for which I thank him.  It's worth reading.

Russian OSCE Envoy Urges Washington, Ukraine to Disclose MH17 Crash Data

The Russian envoy to the Organization for the Security and Co-operation in Europe (OSCE), Andrei Kelin, on Monday once again urged the United States to disclose the satellite imagery that was taken over eastern Ukraine at the time of the Malaysian Boeing crash.

Speaking with Russia's Rossiya 24 TV channel, the Russian envoy said Moscow continued to "insist" that Washington "share its satellite data because there's no way they could not have seen what happened there on that day".

Kelin said Russia "urgently needs" Kiev to disclose the records of negotiations between Ukrainian air traffic controllers.

Neither Kiev nor Washington has so far unveiled the evidence that allegedly implicates east Ukrainian militia in the Malaysian airliner crash, which killed all 298 people on board.

This news story appeared on the sputniknews.com Internet site at 10:36 p.m. Moscow time yesterday evening---and it's another contribution from reader M.A.

NATO Prefers to Ignore Russian Efforts to Stabilize Situation in Ukraine

NATO prefers to ignore the humanitarian crisis in eastern Ukraine and Moscow’s efforts to stabilize situation in the country, the Russian Foreign Ministry said Monday.

“Sadly, NATO prefers to demonstratively ignore Russia’s consistent efforts to stabilize the situation in Ukraine, as well as the worsening social and economic situation in the southeast of this country and its de-facto blockade by the Kiev government,” said Maria Zakharova, the deputy head of the ministry’s information and press department.

She added that the alliance also fails to mention the Kiev government’s violations of reconciliation agreements and the use of heavy weaponry against civilians.

Instead, NATO officials resort to "idle speculations" to justify Russian military involvement in the Ukrainian crisis to boost anti-Russian sentiments and justify its growing military presence near the Russian border, Zakharova added.

This very interesting article was posted on the sputniknews.com website at 4:24 p.m. Moscow time on their Monday afternoon, which was 8:24 a.m. in New York.  It's another contribution from reader M.A.

E.U. countries keen to rebuild Russia relations

Forty eight hours after NATO said Russia is pouring fresh troops into Ukraine, E.U. ministers opted to blacklist some “separatists” while trying to restart talks with Moscow.

The foreign ministers, who met in Brussels on Monday (17 November), in their joint statement called for “a withdrawal of all illegal and foreign forces” from Ukraine.

They also tasked the E.U. foreign service and the European Commission “to present a proposal for decision by the end of this month on additional listings targeting separatists”.

Speaking after the event, E.U. foreign relations chief Federica Mogherini noted that the “main” point of Monday’s discussion was “how to re-engage in a dialogue … Russia is for sure part of the problem, but it is also part of the solution for the crisis”.

This story was posted on the euobserver.com Internet site at 7:34 p.m. Europe time on their Monday evening---and I thank Roy Stephens for bringing it to our attention.

Putin Demonized for Thwarting Neocon Plan for Global Domination

The continuing attacks on Vladimir Putin and Russia by members of the western political, military and journalistic elite tell us one thing – the Russian President is doing a good job both for the people of his country and in the international arena.

For it is a rule which invariably holds true – if the Western elites praise the leader of a foreign country it means he is doing something which is good for those elites and bad for his country. If he’s demonized, as Putin is, it’s the other way round.

The latest attack has come from Martin E. Dempsey, the chairman of the Joint Chiefs of Staff. The U.S. Army general said that Russia was “pushing on the limits of international order.” Dempsey talked of the need to “deter Russian aggression against our NATO allies” – and said that Russia had “kind of lit a fire of nationalism.”

“Once you light that fire, it’s not controllable,” the General said. “I am worried about Europe.” It’s worth reflecting on Dempsey’s words as they provide a classic example of what psychologists call ‘projection’. The US General was accusing Russia of what his own country has been guilty of.

This right-on-the-money commentary appeared on the Russia Today website on the weekend---and was picked up by the lewrockwell.com Internet site on Saturday---and falls into the absolute must read category, especially if your a serious student of the New Great Game.

China Bad Loans Jump Most Since 2005 as Economy Cools

Nonperforming loans rose by 72.5 billion yuan ($11.8 billion) from the previous quarter to 766.9 billion yuan, the China Banking Regulatory Commission said in a statement on Nov. 15. Soured credit accounted for 1.16 percent of lending, up from 1.08 percent three months earlier.

As China heads for the weakest economic expansion since 1990, Communist Party leaders have discussed lowering the nation’s growth target for 2015, according to a person with knowledge of their talks. Bankers’ low appetite for risk and their rising concerns about asset quality are leading to a “sluggish” expansion in credit, according to UBS AG.

“We are still suffering from the aftermath of the credit binge and massive stimulus measures put in place in 2008,” said Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp. “Banks have accelerated recognition of their bad loans in the last two quarters so that they could start the clean-up process.”

This Bloomberg article, co-filed from Shanghai and Beijing, showed up on their website at 7:42 p.m. Mountain Standard Time [MST] on Sunday evening---and it's courtesy of reader Howard Wiener.

Jim Rickards: ‘The debt problem in China is not hype’

You have said that the collapse of the International monetary system does not really mean end of the world. One has to devise new rules.  What exactly do you mean by new rules?

The international monetary system has collapsed three times in the past 100 years — in 1914, 1939 and 1971. Each collapse was followed by a new system devised by the leading trading and financial powers of the time. These new "rules of the game" are arrived at in one or more international monetary conference. Famous examples include the Genoa Conference of 1922, the Bretton Woods Conference of 1944, and the Smithsonian Agreement of 1971, but there have been many others. A new international conference today would probably include the US, EU, Japan, China and Russia as its major players. It would likely be held under the auspices of the G-20 and the IMF. Other important participants would include Brazil, India, Saudi Arabia and the UK. Possible bases for a new international monetary system include the current form of world money, the special drawing right (or SDR), and possibly some role for gold.

Given China’s rising debt, do you think the collapse might get triggered from there?  Or, is the debt problem just a hype?

The debt problem in China is not hype. The collapse of the debt and property bubble there could well be the catalyst for a global economic crisis. About 45% of Chinese GDP is infrastructure investment and a substantial portion of that is wasted on non-revenue generating and unneeded projects and financed with unpayable debt. This debt is funded in part through wealth management products (WMPs), which are like high-yield junk CDOs. This WMP bubble is in addition to the general residential property bubble that has been financed with regular mortgage products. Another source of debt is off-balance-sheet provincial government obligations. China is the greatest debt bubble in history and it will unwind with adverse and unpredictable consequences for global capital markets.

This brief interview with Jim appeared on the internationalfinancemanagazine.com Internet site ten days ago---and I thank Harold Jacobsen for this second contribution to today's column.

Beijing, Canberra Agree on Landmark Free Trade Deal: Abbott

China and Australia have concluded talks on a landmark bilateral deal that will remove tariffs on goods imports and create stimulus for increased mutual investment, a statement on the Australian prime minister's official website said on Monday.

"The landmark China-Australia Free Trade Agreement (ChAFTA) will unlock substantial new benefits for Australians for years to come," the statement announced.

The parties signed a declaration of intent on Monday ending nine years of free trade talks between Beijing and Canberra. Australia agreed to reduce import tariffs on all goods from China to zero, while China pledged to make up to 95 percent of Australian imports tariff-free over the course of several years.

"More than 85 per cent of Australian goods exports will be tariff free upon entry into force, rising to 93 per cent in four years… On full implementation of ChAFTA, 95 per cent of Australian goods exports to China will be tariff-free," the announcement on Prime Minister Tony Abbott's page said.

This news item, filed from Moscow, appeared on the sputniknews.com Internet site at 1:45 p.m. on their Monday afternoon---and it's another offering from reader M.A.  A similar story headlined "Australia and China seal bumper trade deal" showed up on the channelnewsasia.com Internet site at 2:20 p.m. Singapore time yesterday---and it's also courtesy of reader M.A.

Sydney Yuan Hub Seen Saving Importers 7% in Trading: Currencies

Australian importers are in line for a windfall after Chinese President Xi Jinping used his visit to the country to anoint Sydney as a yuan trading center with the two nations completing a free-trade agreement.

The ability to exchange Australian dollars directly into yuan, rather than first converting them into the U.S. currency, will save companies as much as 7 percent on deals with China, according to HSBC Holdings Plc. Chinese investment into Australia has the potential to increase seven times to almost $300 billion by 2020 through the yuan hub and measures such as the trade accord, Westpac Banking Corp. estimates.

“We anticipate that we will see more financial activity in RMB as liquidity increases and the market embraces the benefits of dealing directly with a clearing bank in Sydney,” Rob Whitfield, chief executive at Westpac Institutional Bank, said in a statement today. “We are reaching a tipping point as customers across Asia, New Zealand and Australia are increasingly seeking more renminbi products and services.”

This news item appeared on the Bloomberg Internet site at 2:11 a.m. MST yesterday morning---and it's the second offering of the day from Howard Wiener.

Pepe Escobar: G20 in Australia: Buffoons vs. the Global South

Here’s the G20 in Australia in a one-liner: a tiny bunch of Anglo-Saxon political buffoons attempts to drown out the Global South.

Countries representing over 85 percent of the world economy get together to (in theory) discuss some really heavy economic/financial issues, and virtually the only thing pitiful Western corporate media blabbers about is Russian President Vladimir Putin cutting an ‘isolated figure’.

Well, Washington and its string of puppets did try to turn the G20 into a farce. Fortunately the adults in the room had some business to do.

The five BRICS member-nations – despite their current problems, the G5 that really matters in the world - did meet before the summit, including the ‘isolated figure’. Economically, this G5 more than matches the old, decrepit G7.

This absolute must read essay by Pepe showed up on the Russia Today website at 10:27 a.m. Moscow time on their Monday morning---2:27 a.m. EST.  It's courtesy of Roy Stephens.

Japan's slip into surprise recession paves way for tax delay, snap poll

Japan's economy unexpectedly slipped into recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call a snap election two years before he has to go to the polls.

The recession comes nearly two years after Abe returned to power promising to revive the economy with his "Abenomics" mix of massive monetary stimulus, spending and reforms, and is unwelcome news for an already shaky global economy.

Gross domestic product (GDP) shrank by an annualised 1.6 percent in July-September, after plunging 7.3 percent in the second quarter following a rise in the national sales tax, which clobbered consumer spending.

The world's third-largest economy had been forecast to rebound by 2.1 percent, but consumption and exports remained weak, saddling companies with huge inventories to work off.

Hardly unexpected, dear reader.  Jim Rickards was right again, as you can't solve a structural problem with money printing.  This Reuters story was picked up the finance.yahoo.com Internet site in the wee hours of Monday morning EST---and it's the third and final offering of the day from Howard Wiener.

ECB official says central bank could buy gold to boost inflation

Gold, shares, and exchange-traded funds -- the European Central Bank (ECB) may turn to buying any or all of these in an attempt to boost inflation in the currency bloc.

Yves Mersch, a member of the ECB's executive board, said that the purchase of these assets was "theoretically" an option for the central bank, which earlier this year resolved to "take further unconventional measures to counteract a lengthy period of lower inflation."

His speech, delivered in German, came as official statistics published on Friday showed inflation of just 0.4 percent in the year to October.

The official said that while there was scope to buy such assets, the ECB is about to embark on a programme of asset-backed securities purchases.

Yep, that's what they have to do---and I've been saying it for years.  They actually don't even have to buy the stuff, all they have to do is tell the BIS and JPMorgan et al to get their foot off the gold price---and commodity inflation will take care of itself in a New York minute.  This very interesting article appeared on the telegraph.co.uk Internet site at 10:00 a.m. GMT yesterday---and I found it embedded in a GATA release. [Note: This story sports a revised headline.  It now reads "ECB could buy gold to revive economy".  Mustn't give too much away to the sheeple, now must they?

Ronan Manly: Swiss gold shenanigans intensify prior to November 30 vote

The Swiss National Bank's long transition from an independent holder and advocate of gold reserves to a mere branch of the U.S. Federal Reserve is described in today's commentary at GoldCore by the firm's market analyst, Ronan Manly, a GATA consultant.

I thank Chris Powell for wordsmithing the above paragraph of introduction.  It was posted on both the goldcore.com and gata.org internet site on Friday---and I'm still trying to figure out how I missed it for my Saturday column.  It's on the longish side, but definitely worth reading.

Four key observations from the Deutsche Bank report on the Swiss Gold Initiative

A full copy of last week's Deutsche Bank report on the Swiss Gold Initiative, provided by GATA consultant R.M., conveys these four major points:

1) Any gold purchases made by the Swiss National Bank pursuant to approval of the initiative in the referendum on November 30 are unlikely to have much impact on the gold market because the purchases would be small and made over time and because they likely would be accomplished outside the gold market and through central banks, which are always trading gold among themselves. (Secretly, of course, to facilitate their market interventions.)

2) The Swiss National Bank could evade the intent of the initiative by moving its reserves into a sovereign wealth fund, thereby diminishing the need for purchasing gold; by the bank's obtaining only gold derivatives rather than gold itself; or, more likely, by "window dressing," by the bank's obtaining gold only overnight at monthly reporting periods, using "gold swaps," which could be quickly reversed until the next reporting period.

(In an interview published today, the chairman of the Swiss National Bank said its creation of a sovereign wealth fund was "unthinkable" and that "the SNB cannot simply use some tricks to circumvent the will of the people. I rule that out categorically.")

The rest of Chris Powell's executive summary is contained in this GATA release from Sunday---and it's definitely worth reading if you have time, as it includes the 17-page pdf file from Deutsche Bank.  I found it on the gata.org Internet site on Sunday.

Islamic State to Mint Gold Coins

The “Treasury Department” of the jihadist group that is now occupying large portions of Syria and Iraq announced Thursday that it plans to mint its own currency out of gold, silver and copper.

The goal: To break away from the “satanic usury-based global economic system” and instead use a currency that’s “based on the inherent value of the metals,” the group said in a statement that was distributed on Twitter, according to the SITE Intelligence Group, which monitors online jihadi forums.

Experts who track Islamic State militants and study Islamic finance say the move is part of the group’s ongoing effort to build a government and to reach its stated goal of creating a caliphate. It also comes as the U.S. Treasury Department mounts a global campaign to crack down on the group’s finances.

The gold coins will be called dinars. Some Islamic countries–including Iraq and Libya–call their modern paper currency the “dinar,” but gold dinars stamped with Arabic phrases can be traced back to a much-celebrated caliph named Abd al-Malik.

I've posted a couple of stories about this before, but this one showed up on The Wall Street Journal website of all places---and it's worth skimming.

Iran said to open refinery as 'resistance,' doubling annual gold production

Iranian state television is reporting that the country has inaugurated a new gold-processing plant that will double the country's annual production to 6 tonnes.

The report says First Vice President Ishaq Jahangiri attended the inauguration Saturday of the plant near Takab in northwestern Iran.

It says the new processing facility, built next to Iran's Zarshouran gold mine, also will produce an estimated 2.5 tonnes of silver and 1 ton of mercury a year.

State television says Iran previously produced an estimated 3 tonnes of gold a year.

This short AP story, filed from Tehran, appeared on the abcnews.go.com Internet site very early on Saturday morning EST---and it's another article I found on the gata.org Internet site.

Low gold prices set off buying surge in UAE

Shoppers of gold and jewellery in the UAE have never been in need of a reason or an excuse to buy. There would always be an occasion coming along to indulge in purchases at various times through an year, and if any incentive was needed it would be provided by the generous seasonal promotions such as daily raffles and 1 kilogram of gold as takeaways.

But the ongoing softness in global gold prices is prompting more shoppers to snap up more of the metal in its various forms. According to estimates from the local jewellery trade, retail off take for the full year in the UAE could be up by 15-20 percent in volume terms (in kilograms) compared with 2013. If only the second half of the year is taken into account, which was when prices started to show real weakness, volume gains could even be in the 40-percent range.

“In markets such as the Gulf or India, the price of gold is no longer such a factor in determining customer buying,” said T.S. Kalyanasundaram, Chairman and Managing Director of Kalyan Jewellers, which is working its way towards a major expansion of its retail network in the Gulf.

This gold-related news item, filed from Dubai, showed up on the gulfnews.com Internet site at midnight Gulf Standard Time [GST] on their Sunday evening---4 p.m. in New York on Sunday afternoon.   I found this in a GATA release as well.

Koos Jansen: India Precious Metals Imports Explode in October

Despite all efforts from the Indian government to curtail India’s demand for precious metals – for example a 10% import duty on both gold and silver, the Indian people continue to put their savings in a store of value they consider being prudent; precious metals.

By hiking the import duty on gold in 2013 from 4% to 10% and the implementation of the 80/20 rule importers were thwarted shipping in metal. In part because the importers  needed to find out how to work through the new rules, which were deliberately setup to complicate the process.  

Since 2014  India’s customs department, the DGCIS, discloses preliminary estimates on commodity trade data (only imports for precious metals). The latest data shows gross gold import in October jumped to 106 tonnes, up 13% m/m, up 260% y/y. 106 tonnes gross import is 1,271 tonnes annualized.

Year to date India has officially gross imported (ex smuggling) 597 tonnes of gold, down 21 % y/y, annualized 716 tonnes.

This must read story, which includes comments on their almost-record silver imports in October, showed up on the bullionstar.com Internet site on Monday sometime---and I found it in a GATA release as well.

Indian central bank pressing for more limits on gold imports

The Reserve Bank of India is in talks with the government for a decision on increasing curbs on gold imports, RBI Deputy Governor S.S. Mundra said on Monday.

The RBI deputy also said attention needed to be paid to the surge in gold imports at a briefing with reporters in the capital.

October shipments to India, the world's No.2 gold consumer behind China, jumped to about 150 tonnes from less than 25 tonnes a year earlier and 143 tonnes in September, a finance ministry official said last week.

The above three paragraphs are all there is to this tiny Reuters story.  It was posted on their Internet site at 4:19 a.m. EST yesterday morning---and it's another gold-related news item I found on the gata.org Internet site.  [This story has a revised headline as well, as it now reads "India central bank deputy says talking to govt on increasing gold import curbs"]

Modi effect on India's gold market ‘remarkably impressive’

Prime Minister Narendra Modi’s government has had a “remarkably impressive” effect on consumer confidence in buying gold since coming to power earlier this year, World Gold Council head of intelligence Alistair Hewitt said.

He expects this trend to continue given the improving Indian economy despite the Bharatiya Janata Party’s failure to lift restrictions aimed at curbing gold imports as had widely been expected, he told FastMarkets.

“One of the most striking features about the Indian gold market has been the economic confidence of Indian consumers,” Hewitt said. “[Indian buying] has been so important for the market for the last 20 years – I don’t see that changing any time soon.”

I found this gold-related story on the mineweb.com Internet site yesterday---and it's worth skimming.

Koos Jansen: Who's feeding China's gold hunger?

Bullion Star market analyst Koos Jansen, a GATA consultant, reviews figures for gold exports to China on a nation-by-nation basis. He concludes that demand for gold in China remains strong and is running at more than twice the amount reported by the World Gold Council.

Jansen's commentary is headlined "Who's Feeding China's Gold Hunger?" and it's posted on the bullionstar.com Internet site on Saturday---and although it's on the longish side with lots of charts---it's worth wading through if you have the time.

Koos Jansen: SGE Withdrawals Strong, China Increases Solar Power

Another very strong week for Chinese wholesale gold demand, measured by withdrawals from the Shanghai Gold Exchange. In week 45 (November 2 – 7) physical withdrawals from the vaults accounted for 54 tonnes. My basic equation tells me more than 40 tonnes had to be imported to meet this demand. Year to date 1,708 tonnes have been withdrawn from the vaults and this number will likely surpass 2,000 tonnes by year end as December and January are seasonally the strongest months.

This commentary is a must read, especially the embedded Bloomberg story about solar power and silver.  This commentary by Koos was posted on the bullionstar.com Internet  site yesterday---and it's another story from the gata.org website.

U.S. gold output off 11% in August - USGS

Gold production by U.S. Mines was 18,400 kilograms (591,573 troy ounces) in August this year, an 11% decline from the 20,700 kg (665,520 oz) of gold output reported in August 2013, the U.S. Geological Survey noted Monday in its Mineral Industry Surveys.

Average daily U.S. gold production for U.S. mines was 592 kg (19,033 oz) in August 2014, according to the USGS.

U.S. gold production for the first eight months of this year totaled 140,000 kg (4,501,104 oz). U.S. gold exports of gold ore and concentrates, doré and precipitates, and refined bullion totaled 291,000 kg (9,355,867 oz) during the same period, Geological Survey data revealed.

The country also imported a total of 210,000 kg (6,751,656 oz) of gold ore and concentrates, doré and precipitates, and refined bullion from January until August of this year.

The above four paragraphs are all there is to this brief news item that appeared on the mineweb.com Internet site in the wee hours of this morning.

Eric Sprott: Global Gold Demand is Overwhelming Supply

Precious metals have had an especially tough go of it over the past month. Both gold and silver are back in price territory last seen in 2010.

Eric Sprott returns to the program to discuss the facts as we know them in this market, and what's likely to happen from here. Specifically, he explains the tremendous imbalance currently seen between global supply and demand for precious metals. In his view, prices will have to correct upwards -- prodigiously -- to bring the two back in alignment.

This 38:45 minute must listen audio interview put in an appearance on the peakprosperity.com website late on Sunday morning---and I thank reader U.D. for passing it around on Sunday evening.

¤ The Funnies

Back to Pāhoa Village on the 'Big Island' Hawai'i once again:  The inflation along the lava tube has created a long ridge with a deep, semi-continuous crack along the ridge center line (right side of image). The peak of the ridge, by rough estimate, is about 4 meters (13 feet) above the original ground surface. This photo looked northeast along the trend of the tube, just south of the cemetery. The short section of uncovered road is the cemetery access road.  [To give you some orientation for this photo, the white object at the left center of this photo---a crushed metal garden/utility shed---is the tiny white object perched on the lava flow almost in the center of the aerial photo below this one.]  Once again, the 'click to enlarge' feature is a must.  The photos and description are courtesy of the the HVO Internet site.

¤ The Wrap

The real message in [Friday's Commitment of Traders Report were] the extraordinary changes among the commercial traders. On the plunge to four year silver price lows over the past two reporting weeks, the raptors [the Commercial traders other than the 'Big 8'] sold 9,700 long contracts and the 'Big 8' bought back more than 6,300 short contracts (with the Big 4’s share of that being 4,000 contracts). Never have the commercials, usually thick as thieves, gone in such different directions. Heretofore, it was always the commercials behaving as the three musketeers – you know, all for one, and one for all. Not this time.

From the data, here’s what I think occurred. The big commercial shorts (JPM) knew that some raptors were stretched thin on margin on a massive long position in silver that totaled 42,400 contracts two weeks ago. When the price of silver suddenly plunged an additional two dollars, the margin calls were overwhelming for a number of the raptors and they were forced to liquidate almost 10,000 of their long contracts. A two dollar adverse move on 10,000 contracts means coming up with $100 million on, quite literally, a moment’s notice. If you don’t have the $100 million to deposit immediately, you are sold out immediately.

Since the biggest beneficiaries of the price plunge (apart from the technical funds, which, no matter what, are not running the show like the commercials) were the biggest shorts (including JPMorgan) which bought back 6,300 shorts at immense profits; it stands to reason that these big shorts orchestrated the whole damn thing. Otherwise, I suppose you would have to believe that the commercials are such clean good guys that someone from above rewarded them. Looking at the almost daily settlements for price manipulation [in other areas] by the big banks, it’s not possible they are innocent good guys in any way. - Silver analyst Ted Butler: 15 November 2014

Except for the 9:00 a.m. Hong Kong time spikes in all four precious metals, Monday was a nothing sort of day from a price perspective---and I'm still trying to figure out why volume was so heavy, particularly the volume going into the London open.  I suppose part of it involved hammering gold and silver back to unchanged, but certainly not all of it.  There was roll-over activity out of the December contract yesterday, of course---but it wasn't overly heavy.

Here are the 6-month charts for gold and silver once again, as there's not much to see in the other four of the 'Big 6' commodities---and there's not much to see in silver or gold, either.

The 50-day moving averages in both precious metals continue to slide lower by the day---and the 200-day moving averages are miles away at the moment.

And as I type this paragraph, the London open is about thirty minutes away.  After dipping down a bit in early trading in the Far East on their Tuesday morning, all four precious metals are back to unchanged.  Gross gold volume is a bit over 17,800 contracts, including about 800 roll-overs, so it nets out to a hair over 17,000 contracts.  In silver, the gross volume is a bit over 4,900 contracts, less 200 roll-overs, so netted out, the volume is 4,700 contracts.  The dollar index fell out of bed right at the open of trading in New York yesterday evening---and is currently down 19 basis points.

If we get through the Tuesday trading session today without too much price activity, then this Friday's Commitment of Traders Report will show exactly what happened during last Friday's trading session, because it will have been the only day during the reporting week that had any price/volume activity worth mentioning.  As Ted pointed out, there were two trading days rolled into one on that day---the down moves with big volume in both gold and silver in the Far East and early London session, before the even bigger rally and volume that came after the COMEX open.

I wouldn't be at all surprised if the 'Big 8' short holders engineered it, just like they did during the prior reporting week, so the could cover more of their short positions during that particularly trading session, with the raptors as the patsies once again.  If that is indeed what happened, then it will be readily visible in the new COT Report.

So we wait.

Just reading the highlights of the precious metal-related stories in today's column, it's easy to see that the demand for gold has become ferocious.  Silver demand is even greater, as India imported almost a record amount in October---and China, in the Bloomberg story mentioned above, says they want to increase solar panel production by a factor of ten next year.

Then there's the 40+ million silver eagles sold [mostly to JPMorgan] this year---and add to that the counterintuitive amount of silver heading into SLV---along with the manic in/out silver activity at the COMEX-approved depositories for the last number of years.  I'm sure that when the Royal Canadian Mint reports 3rd quarter results later this month, they will show record sales in silver maple leafs as well.

This Swiss gold repatriation looms large---as the vote on that is less than two weeks now.  And not to be forgotten in all of this is the story above that mentions that the ECB may buy gold to boost inflation.

Sooner or later---and sooner rather than later, I would think---something has got to give.

And as I send this off to Stowe, Vermont at 5:18 a.m. EST, I see that all four precious metals began to rally almost the moment that I had finished my prior commentary a half hour before the London open.  The rallies haven't been allowed to get far, as their prices are obviously being capped by JPMorgan et al.

Net gold volume is now around 49,000 contracts, with very few roll-overs, so it's obvious that this is almost exclusively composed of high-frequency trading.  Silver's net volume is just under 11,000 contracts, with no roll-overs there to speak of, either.  The U.S. dollar is now down 43 basis points---and the decline appears to be accelerating at the moment.

As for what might happen during the remainder of the Tuesday session, I haven't a clue---but I'm not overly happy to see such huge volumes associated with this level of price activity, although gold has now broken above the $1,200 spot price mark as I hit the send button, with silver and platinum putting on the same sort of show.  Based on what I'm looking at right now, absolutely nothing will surprise me when I check the charts later this morning.

Here's the Kitco gold chart as I fire today's column out the door.

See you tomorrow.

Ed Steer

]]>
Tue, 18 Nov 2014 06:35:00 +0000
<![CDATA[India Back to Being the World’s Top Gold Consumer]]> http://www.caseyresearch.com/gsd/edition/india-back-to-being-the-worlds-top-gold-consumer/ http://www.caseyresearch.com/gsd/edition/india-back-to-being-the-worlds-top-gold-consumer/#When:09:57:00Z "That leaves Canada's Scotiabank as the 'King Short' in the COMEX silver market"

¤ Yesterday In Gold & Silver

The gold price traded pretty flat until 1 p.m. Hong Kong time---and at that time, it got sold lower to the tune of about twelve bucks or so.  From that point onward, it didn't do much---and the low tick came around 8:35 a.m. in New York, about 15 minutes after the COMEX open.  The price never looked back from there---and starting around the 9:30 a.m. open of the equity markets it began to rally with a vengeance.  The high tick came shortly before the 1:30 p.m. Comex close---and the price didn't do much after that.

The low and high ticks were reported as $1,146.00 and $1,192.90 in the December contract.

Gold closed in New York yesterday at $1,188.50 spot, up $26.60 from Thursday's close.  Net volume was sky high at 255,000 contracts.  Gross volume was well north of 300,000 contracts, so it was a very active day.

Here's the 5-minute tick gold chart.  It doesn't show the HFT trading before the London open, but it certainly shows the low tick around 8:40 a.m. EST.  Note the big volume spikes on each up-tick.  Don't forget to add 2 hours for EST, as the 'x' axis of this chart is MST.

As is normally the case, the silver price was under pressure right from the 6 p.m. EST open on Thursday evening in New York and, like gold, got hit by the HFT boyz around 1:30 p.m. in Hong Kong trading on their Friday afternoon.  It hit its $15.20 [spot] low tick an hour and change later.  From there it rallied a bit into the London open---and then traded flat before retesting the earlier low minutes after 1 p.m. GMT in London.  From there, like gold, the price never looked back, melting up to its high tick of the day around 1:15 p.m. EST---and 15 minutes before the Comex close.  And also like gold, the price traded flat from there into the 5:15 p.m. close of electronic trading.

The low and highs were recorded by the CME Group as $15.25 and $16.38 in the December contract, an intraday move of over 7 percent.

Silver closed yesterday at $16.325 spot, up 66 cents from Thursday's close.  Net volume was 71,000 contracts.

The platinum price didn't do much until shortly after 1 p.m. in Zurich.  At that point the price got sold down for a double bottom which occurred between 8:30 and 9:30 a.m. EST---and from there it rallied like gold and silver until 1:15 p.m.   From there it chopped sideways into the close.  Platinum closed up 16 bucks.

The palladium price chart was somewhat similar to the platinum chart, but the low price tick that came shortly after the COMEX open was rather vicious in nature---and the metal barely rallied back above unchanged by 12:30 p.m. EST.  From there it got sold down for a three dollar loss on the day.

The dollar index closed late on Thursday afternoon in New York at 87.77---and from there it rallied up to 88.07 at exactly 2 p.m. Hong Kong time, before selling down to 87.85 around 8:30 a.m. GMT.  The 88.23 high tick came in a spike that occurred around 8:30 a.m. in New York.  That was the high water mark for the dollar index---and the beginning of the rally in all four precious metals.  It all looks so co-ordinated, that it's hard to believe that it was accidental.

From that high, the index slid down to its 87.40 low tick shortly before 2:30 p.m. EST---and it recovered a handful of basis points going into the close.  The index closed at 87.55, which was down 22 basis points from Thursday's close.

Here's the 6-month dollar index---and it indicates, at least to me, that we've seen a major top.  I've mentioned a few times in the last week or so that it might be a good idea to hit the bid if you were long the U.S. dollar.

The gold stocks opened in the red, but didn't stay there long, as HUI powered higher all day long, closing up 6.93%---and just off its high tick of the day.

The silver equities, not surprisingly, did even better, as Nick Laird's Intraday Silver Sentiment Index closed up 7.86%.

After a surprising report on Thursday, the CME Daily Delivery Report for Friday had another surprise in store, as 462 gold contracts and 1 lonely silver contract were posted for delivery on Tuesday.   It was JPMorgan out of its client account again, this time with 385 contracts, along with ABN Amro with 69 contracts out of its client account as well.  The big stopper for the second day in a row was Canada's Scotiabank with 456 contracts.  Something appears to be up, but it's impossible to tell exactly what it is.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed incredible internal action within the November delivery month in gold.  At the start of the trading day, November open interest had been as high as 942 contracts before Monday's deliveries were subtracted, so November o.i. was back down to 476 contracts once that happened---and once you subtract out the 462 contracts posted for delivery on Tuesday that are shown in the previous paragraph, the November open interest is back down to only 14 contracts.  One still has to wonder if there will be any more surprises, but the fact that such large deliveries are being made back-to-back in a non-delivery month is of great interest---and Ted Butler may or may not have something to say about it in his weekly review later today.  Silver's November open interest remained unchanged at 89 contracts.

There were no reported changes in GLD yesterday---and as of 10:30 p.m. EST yesterday evening, there were no reported changes in SLV, either.

It's a given that yesterday's price action will have brought out the GLD and SLV buyers in droves---and it will be interesting to see how much metal is deposited to meet this new demand.  And if the metal isn't there, the authorized participants will be forced to short the shares in lieu of, like JPMorgan has been doing all along in silver, as the quantity of physical metal needed just doesn't exist.

The U.S. Mint had a sales report yesterday.  They sold 10,000 troy ounces of gold eagles---and 1,500 one-ounce 24K gold buffaloes.

And as I mentioned yesterday, the mint will be back to selling 2014 silver eagles on an allocated basis starting on Monday.  It will be interesting to see how many they actually make---and for how long---as it's a given that every one of them will already have a willing buyer.

There wasn't much in/out movement in gold over at the Comex-approved depositories on Thursday.  Nothing was reported received---and only 4,496 troy ounces were removed.

There wasn't a lot of activity in silver either, as only 201,101 troy ounces were reported received---and 169,588 troy ounces were shipped out.  The link to that activity is here.

The Commitment of Traders Report for positions held a the close of trading on Tuesday was a very interesting report in both silver and gold.  Ted spent over half an hour on the phone with me yesterday going through the whole thing, but I'm just going to hit the highlights.

In silver, the Commercial net short position in the legacy COT Report blew out by 5,204 contracts, or 26.0 million troy ounces.  The Commercial net short position is now back up to 88.1 million troy ounces.

Under the hood in the Disaggregated Report, the traders in the Managed Money category sold 142 long contracts and covered 3,811 short contracts---and made a boat-load of money on those, which is what they did in the prior week's COT Report as well.  At that time I said that I was sure that JPMorgan et al wouldn't have been happy to see these traders flee their carefully-set trap with big profits in hand---and I'm sure they were even less happy with this weeks' report.

But the big news according to Ted was the fact that despite the blow-out in the Commercial net short position, there was no new shorting going on.   And to make things even more interesting, the 'Big 8' short holders actually decreased their overall short position in silver during the reporting week.  Ted now puts JPMorgan's short position at something under 8,000 contracts, which means that they are no longer the big silver short on the COMEX.  That crown now belongs to Canada's Scotiabank---and has for many months.  I estimate their net short position in silver to be in the 16,000 contract range, or maybe a bit more.

In gold, the Commercial net short position in the legacy COT Report actually declined by 5,283 contracts, or 528,300 troy ounces.  The Commercial net short position is now down to only 5.00 million troy ounces---and it has been many a moon since it's been that low.  I know that Ted will have that actual number in his column later today.

The Managed Money traders in the Disaggregated COT Report made the numbers look even better, as they sold 2,846 long positions---and went short an additional 5,344 contracts, a swing of almost 8,200 contracts.

Ted says that JPMorgan increased its long-side corner in the COMEX futures market in gold by about 1,000 contracts---and they are now net long about 21,000 contracts.

Without doubt there was overall deterioration in the Commercial net short position in all four precious metals since the cut-off---and the only thing unknown is to what degree it occurred, especially in gold and silver.

Ted said that there were actually two different trading days rolled into one yesterday.  The big sell-offs before the Comex open, where there was huge volume on the downside moves---followed by the short-covering rallies after that, with even bigger volume.  How it all netted out is unknown and, depending on what the price action is like on Monday and Tuesday, we may or may not find out in next Friday's COT Report, because market events on those two days may bury Friday's action.  So we wait.

Since this is my Saturday column, I get to empty my in-box into it---and that's precisely what I intend to do, so edit away!

¤ Critical Reads

Jim Rickards Speaks to "The Business" in Australia

As Joe Hockey calls on G-20 leaders arriving in Brisbane to focus on growth, at least one leading economist thinks much of the world is in a depression, but we just haven't noticed yet. Jim Rickards, the author of 'Currency Wars' and 'The Death of Money', speaks to commentator Andrew Robertson.

This 6:15 minute audio interview was posted on the abc.net.au Internet site at 3:25 a.m. Australian Eastern Standard Time [AEST] on their Thursday morning 'down under'---and I thank Harold Jacobsen for today's first news item.

Pimco Paid Gross, El-Erian Over Half a Billion Dollars in 2013 Bonuses

Pacific Investment Management Co. paid its former Chief Investment Officer Bill Gross a bonus of about $290 million in 2013, a year in which his Total Return Fund trailed a majority of peers, according to documents provided to Bloomberg View by someone with knowledge of Pimco’s bonus policies.

Mohamed El-Erian, 56, the former chief executive officer who previously shared the title of CIO with Gross, received a 2013 bonus of about $230 million, according to figures first reported today by Bloomberg View columnist Barry Ritholtz.

This Zero Hedge article is built around a Bloomberg piece from yesterday---and it was posted on their Internet site at 7:16 a.m. EST yesterday---and I thank reader M.A. for sharing it with us.

Congress Passes Keystone XL Pipeline Bill, Senate Can't Block, Obama Veto To Come?

The Republican-led U.S. House of Representatives approved the Keystone XL pipeline on Friday, but a similar measure struggled to get enough support in the Senate and President Barack Obama indicated he might use his veto if the bill does get through Congress.

The legislation, approved by 252 votes to 161, circumvents the need for approval of TransCanada Corp's  $8 billion project by the Obama administration, which has been considering it for more than six years. No Republicans voted against the measure, while 31 Democrats voted for the bill.

It was the ninth time the House has passed a Keystone bill, and supporters were confident that this time the Senate would follow suit and pass its version.

But passage was not assured in the Senate, which is expected to take up the measure next Tuesday. Supporters were still one vote shy of the 60 needed to overcome a filibuster, a blocking procedure, an aide to a Keystone supporter said on Friday. The aide spoke on condition of anonymity.

This Reuters article, filed from Washington, appeared on their website at 5:36 p.m. EST on Friday---and I borrowed the headline from a Zero Hedge article on this.  I thank reader M.A. for his second offering in a row.

Economist Dean Baker: Many Americans Have Waved Goodbye to Their Nest Eggs

Many Americans are nearing retirement with only Social Security to support them and a mortgage that is far from paid off — and the situation might be getting worse.

According to Dean Baker, co-director of the Center for Economic and Policy Research, the nest egg that many could once rely on when they sold their homes and downsized has now vanished in a lot of cases.

In a column for Fortune, Baker noted that because home prices are still considerably below their 2007 peaks, the U.S. middle class has had no comparable gains in their household wealth during the current recovery.

"This is a bad picture for the country as a whole, but it is especially bad news for those at the edge of retirement," he wrote.

This article was posted on the moneynews.com Internet site at 8:00 a.m. EST yesterday---and it's courtesy of West Virginia reader Elliot Simon.

Stockman: Central Banks 'Out of Control Fueling Bubble'

David Stockman, White House budget director under President Reagan, has warned about the dangers of a financial crisis for some time, and he's not backing down now.

"Each and every day the central banks in the world get more out of control fueling a bubble the likes of which we have never seen in modern times, if ever," he told Fox Business Network.

Stockman was referring to central bank easing programs. The Federal Reserve apparently plans to keep interest rates near zero until at least the middle of next year.

Meanwhile, the Bank of Japan recently announced a major increase in its monetary stimulus, and European Central Bank President Mario Draghi has said in recent weeks that the ECB will expand its accommodation, too.

This brief article appeared on the newsmax.com Internet site at 6:09 p.m. on Thursday evening EST---and it's the second story in a row from Elliot Simon.  It's definitely worth reading.

Doug Noland: Financial Sphere Bubbles

The Fed and global central bankers gambled that Financial Sphere intervention, manipulation and inflation would spur real economy reflation.  It’s clear they’re playing a losing hand – it is also apparent that they are not willing to admit their flaws, failings or predicament.  The harsh reality is that central bankers cannot escape Financial Sphere fragility. 

When Global Financial Sphere fragility turned acute back in the summer of 2012 (i.e. Italy, European banks and the euro), Draghi, Bernanke and Kuroda adopted unprecedented measures.  They bought some time but at major costs, including the U.S. securities Bubble, a Bubble in European sovereign debt and unprecedented global leveraged speculation (how big is the “yen carry trade”?).  Several weeks back there were indications that Global Financial Sphere fragility was resurfacing.  And there were indications from Fed officials that more QE could be forthcoming, while Draghi and Kuroda came with more shock and awe monetary stimulus.

The latest Fed, ECB and BoJ show did wonders for U.S. and Japanese stock prices.  Yet yen and euro devaluation bolstered king dollar, much to the expense of commodity-related companies, currencies and countries.  Russia’s ruble was hit again this week, as geopolitics turned only more disconcerting.  There was also further indication of acute fragility unfolding in Brazil.  The Brazilian real dropped 1.65% and 10-year (real) yields jumped another 36bps to 12.92%.  Venezuela 10-year bond yields surged 123 bps to 19.73%.  It’s also worth noting that Mexican stocks were hit for 2.8%.  All in all, evidence mounts of serious EM vulnerability.  I’m sticking with the view that the global Bubble has been pierced and that contagion risks are mounting.  As for U.S. equities, the level of bullishness and complacency is just incredible.  Apparently nothing can get in the way of the mighty year-end rally.

Doug's must read weekly Credit Bubble Bulletin was posted on the prudentbear.com Internet site very late last night.

Jail time demanded for bad bankers

The latest scandal to hit the banking world has led to renewed calls for the authorities to finally clamp down on malpractice by jailing traders. But will the foreign exchange fraud, the latest in a long list of malpractices, force banks to change their ways?

“In most businesses, the normal penalties for defrauding a customer include the risk of a jail sentence,” read a recent Financial Times editorial. “If the authorities really want to change the culture of the trading desk, criminal sanctions must become a more vivid possibility.”

Switzerland’s public prosecutor appears to have opened the door to this possibility by starting criminal probes into several people connected with forex fraud at UBS. The allegations of financial mismanagement and breaching banking secrecy laws carry respective penalties of up to five and three years in prison.

The Swiss Financial Market Supervisory Authority (FINMA) is also investigating 11 individuals, including managers, having until now only demanded that UBS hands back CHF134 million ($140 million) in fraudulently obtained profits.

Yep, until bankers risk jail time, there won't be any change in behavior.  This article appeared on the swissinfo.ch website at 1:57 p.m. Europe time on their Friday afternoon---and it's courtesy of South African reader B.V.

France compares David Cameron to far-Right leader following his fury at the E.U. budget

France has risked a major diplomatic row with the UK after a senior government figure likened David Cameron to far-Right leader Marine Le Pen, saying his handling of a row over whether Britain should pay a £1.7 billion bill was “nationalistic” and “Byzantine”.

The French figure, who is close to President Francois Hollande, said that the Prime Minister had displayed “no European solidarity” when he hit out against the budget bill demanded by the EU because of the success of Britain’s economy.

He called the bill “outrageous” and refused to pay “anything like” the amount demanded by Brussels.

George Osborne, the Chancellor, was subsequently able to get the bill cut to £850 million, payable in interest-free instalments next year.

But the bill will get paid one way or another, as Britain is going nowhere because Cameron too, is a card-carrying member of the New World Order.  This story appeared on the telegraph.co.uk Internet site at 2:45 p.m. GMT on Friday---and it's worth skimming.  I thank reader B.V. for his second contribution in a row.

Eurozone dodges triple-dip recession but submerges in 'lost decade'

The eurozone has averted a triple-dip recession but remains stuck in a deep structural slump, with too little momentum to create jobs or to stop a relentless rise in debt ratios.

The region eked out growth of 0.2pc in the third quarter, yet Italy’s economy shrank again and has now been in contraction for over three years.

Stefano Fassina, the former deputy Italian finance minister, said “Titanic Europe” is heading for a shipwreck without a radical change of course.

He warned that contractionary policies are destroying the Italian economy and called on the country’s leaders to “bang their fists of the table”. He said they should threaten an “orderly break-up” of the euro unless policies change. His comments have made waves in Rome since he is a respected figure in the ruling Democratic Party of Matteo Renzi.

This longish Ambrose Evans-Pritchard commentary showed up on The Telegraph's website at 4:33 p.m. GMT yesterday afternoon---and it's the third offering in a row from reader B.V.  It's worth the read if you have the time.

Italy protests erupt across the country

Italy was hit by strikes, violent demonstrations and protests against refugees on Friday as anger and frustration towards soaring unemployment and the enduring economic crisis exploded onto the streets.

Riot police clashed with protesters, students and unionists in Milan and Padua, in the north of the country, while in Rome a group of demonstrators scaled the Colosseum to protest against the labour reforms proposed by the government of Matteo Renzi, the 39-year-old prime minister.

Eggs and fire crackers were hurled at the economy ministry.

On the gritty, long-neglected outskirts of Rome there was continuing tension outside a centre for refugees, which was repeatedly attacked by local residents during the week.

This news story, filed from Rome, was posted on the telegraph.co.uk Internet site at 4:43 p.m. GMT yesterday afternoon---11:43 a.m. EST.  It's the final contribution of the day from South African reader B.V.---for which I thank him.

Mayor of Nice, ‘France’s first Russian city’, slams Moscow-bashing

The sun-soaked city of Nice is known around the world for its famous seaside walkway, the “Promenade des Anglais”. But over the past century, it has been more of a promenade for Russian tycoons and émigrés.

Its conservative mayor, Christian Estrosi, is an outspoken advocate of close ties with Russia.

This week, he travelled to Moscow to promote Russian investment in the French Riviera.

As proof of his fondness for President Vladimir Putin’s country, he even posted several tweets in Cyrillic---and at a time of escalating tension between Moscow and the West, his visit inevitably took a highly political tone.

This is as it should be---and I salute him.  This news story showed up on the france24.com Internet site on Thursday sometime---and it's the first offering of the day from Roy Stephens.

Protesters Rally in Kiev Demanding Bank Deposits Back: Reports

Ukrainians gathered outside the National Bank headquarters in Kiev on Friday, demanding their deposits back from VAB Bank.

Demonstrators are holding banners and placards calling for the VAB’s main shareholder, Oleh Bakhmatiuk, “to return the money,” according to photos posted by freelance journalist Volodymyr Solohub on Twitter.

Since early October, VAB Bank has been delaying the return of deposits to its clients, with Ukrainian media speculating on its possible bankruptcy.

This short article appeared on the sputniknews.com website at 1:46 p.m. Moscow time on their Friday afternoon, which was 5:46 a.m. in New York---and I thank reader M.A. for finding it for us.

Ukraine faces economic breakdown as war returns

The International Monetary Fund faces a fresh debacle as Ukraine burns through an $17bn rescue package agreed in April and spirals into a full-blown currency crisis, with credit markets already bracing for likely default.

The country's foreign reserves have dropped to $12.6bn, barely enough to cover six weeks worth of imports. Its currency has been in free fall since it became clear that the Minsk ceasefire deal with rebels in the Donbass region was breaking down.

The Hyvrnia has crashed 20pc against the dollar over the past week and has lost almost half its value this year, making it much harder for Ukrainian companies, banks and the state to service $60bn of foreign debt, mostly in dollars.

The economy is expected to contract by 10pc this year, twice what the IMF expected when it first approved the bailout. Ukraine still has another $10bn of IMF aid to come but the pace of disbursements is too slow to keep the country afloat.

This must read article by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 5:00 a.m. GMT yesterday---and my thanks go out to Roy Stephens for bringing it to our attention.

Gazprom Raises Risk Level of Gas Transit Through Ukraine to Critical

Russia’s gas giant Gazprom has heightened the risk level of Russian transit gas to Europe through Ukraine to “critical,” the company said in a report Friday.

“At the current moment, risks with the transit of natural gas through the territory of Ukraine have been raised to the critical level. This situation is tied with Ukraine’s Naftogaz’s arrears before Gazprom for gas delivered September 30, 2014, that stand at approximately $5.3 billion,” the report reads.

On October 30, during the final round of gas talks between Russia and Ukraine, brokered by the European Union, a so-called winter package agreement securing gas supplies to Ukraine until March was signed.

This RIA Novosti story was posted on the sputniknews.com Internet site at 2:45 p.m. Moscow time on their Friday afternoon---and it's another article from reader M.A.

Marin Katusa: “Russia Back to Superpower Status”

Russian President Vladimir Putin has re-established his country as a global superpower. "Not only that, he's got the other emerging markets working in concert against U.S. interests, globally," said Marin Katusa, author of The Colder War, during an interview on the "Steve Malzberg Show" on Newsmax TV. On top of that, Marin added, "Western Europe's become more addicted to Russian sources of oil and natural gas."

This 7:58 must watch video clip was embedded in this article from Casey Research yesterday---and yes, it's a shameless plug for Marin's new book.  But as I've said on several occasions---including my own review of the book from several weeks ago---it's well worth the money and I highly recommend it.

Putin: Russian Economy Won't Be Dominated by 'Dollar Dictatorship'

Russia plans to leave the “dollar dictatorship” of market oil prices and turn to using the country’s national currency and the Chinese yuan, Russian President Vladimir Putin said Friday.

“We are leaving the dictatorship of the market where oil goods are based on the dollar and will increase the possibilities of using [other] national currencies: the ruble and the yuan,” Putin said in an interview with the Russian state news agency TASS.

On a November 9 meeting on the sidelines of the APEC summit Putin and Chinese President Xi Jinping discussed the possibility of using the yuan in transactions in fields of mutual cooperation.

Putin said in his Monday speech at the Asia-Pacific Economic Cooperation (APEC) summit in China that accounting in the ruble and yuan will most likely weaken the dollar’s influence on the global energy market.

This sputniknews.com article, filed from Moscow, appeared on their website at 12 o'clock noon Moscow time on their Friday afternoon---and the articles from reader M.A. just keep on coming, almost like he's trying to beat out Roy Stephens today.

Iranian version of captured U.S. RQ-170 drone makes maiden flight

Iran has put into operation a final version of the sophisticated U.S. RQ-170 drone, which was captured in 2011 and later reverse-engineered by Iranian experts, the commander of the Aerospace Division of the Islamic Revolution Guards Corps announced on Monday.

The domestically produced version of the RQ-170 stealth aircraft has made a successful inaugural flight, Brigadier General Amirali Hajizadeh said.

The U.S. aircraft was downed with minimal damage by the Iranian Army’s electronic warfare unit in December 2011, while flying over the Iranian city of Kashmar, some 225 kilometers from the Afghan border.

This very interesting news item appeared on the tehrantimes.com website on Monday---and it's been waiting for a spot in my Saturday column.  I thank Roy Stephens for digging it up for us. 

‘Stealth drone technology – ace in Tehran hands’

The U.S. will have to bite the bullet over Iran building a copy of its cutting-edge stealth drone, Kaveh Afra-siabi, a political scientist and author, told Russia Today. The technology is a major plus for Tehran’s deterrent strategy vis-à-vis U.S. power in the region.

The Iranian military has released a video, apparently showing the successful maiden flight of an advanced drone.

RT: Three years ago Barack Obama called on Iran to return the crashed drone. The Iranians told the U.S. leader that the drone breached its airspace and refused to hand it over. Was that a serious loss of face for the U.S.?

Kaveh Afra-siabi: To begin with, this drone was intercepted 140 miles deep inside Iranian territory. Obviously the Iranians had every justification to hold on to it and then tried to successfully decode the sensor data and be able to copy it and showcase it as we have seen in the video today. Iran has a very developed drone capability and has already manufactured a number of high-tech drones for the dual purpose of combat and surveillance. In today’s context of the U.S. trying to leverage Iran vis-à-vis the nuclear negotiations and so on, this is an important and impressive victory for Iran that reflects an enhanced capability to monitor the movement of military missiles in the region, particularly in the Persian Gulf region. This stealth technology has the ability to deflect radar and to penetrate air defense. Iran’s ability to integrate the cutting-edge U.S. stealth technology in its drone arsenal is a major plus for it and its deterrence strategy vis-à-vis U.S. power in the region.

This very interesting Russia Today article appeared on their website at 4:38 p.m. Moscow time on their Thursday afternoon---and it's another story that I'd been saving for today's column.  It's also courtesy of Roy Stephens.

David Vine: A Permanent Infrastructure for Permanent War

In a September address to the United Nations General Assembly, President Barack Obama spoke forcefully about the “cycle of conflict” in the Middle East, about “violence within Muslim communities that has become the source of so much human misery.” The president was adamant: “It is time to acknowledge the destruction wrought by proxy wars and terror campaigns between Sunni and Shia across the Middle East.” Then with hardly a pause, he went on to promote his own proxy wars (including the backing of Syrian rebels and Iraqi forces against the Islamic State), as though Washington’s military escapades in the region hadn’t stoked sectarian tensions and been high-performance engines for “human misery.”

Not surprisingly, the president left a lot out of his regional wrap-up. On the subject of proxies, Iraqi troops and small numbers of Syrian rebels have hardly been alone in receiving American military support. Yet few in our world have paid much attention to everything Washington has done to keep the region awash in weaponry.

American bases.  Even if you take into account the abandonment of its outposts in Iraq -- which hosted 505 U.S. bases at the height of America’s last war there -- and the marked downsizing of its presence in Afghanistan -- which once had at least 800 bases (depending on how you count them) -- the U.S. continues to garrison the Greater Middle East in a major way.  As TomDispatch regular David Vine, author of the much-needed, forthcoming book Base Nation: How U.S. Military Bases Overseas Harm America and the World, points out in his latest article, the region is still dotted with U.S. bases, large and small, in a historically unprecedented way, the result of a 35-year-long strategy that has been, he writes, “one of the great disasters in the history of American foreign policy.” That’s saying a lot for a nation that’s experienced no shortage of foreign policy debacles in its history, but it’s awfully difficult to argue with all the dictators, death, and devastation that have flowed from America’s Middle Eastern machinations.

This essay is your big read of the day.  And if your interests lie in Middle East and New Great Game politics, it certainly falls into the absolute must read category.  Once again I thank reader M.A. for passing it along yesterday.

Pepe Escobar: China's silky road to glory

If there were any remaining doubts about the unlimited stupidity Western corporate media is capable of dishing out, the highlight of the Asia-Pacific Economic Cooperation (APEC) summit in Beijing has been defined as Russian President Vladimir Putin supposedly "hitting" on Chinese President Xi Jinping's wife - and the subsequent Chinese censoring of the moment when Putin draped a shawl over her shoulders in the cold air where the leaders were assembled. What next? Putin and Xi denounced as a gay couple?

Let's dump the clowns and get down to the serious business. Right at the start, President Xi urged APEC to "add firewood to the fire of the Asia-Pacific and world economy". Two days later, China got what it wanted on all fronts.

1) Beijing had all 21 APEC member-nations endorsing the Free Trade Area of the Asia-Pacific (FTAAP) - the Chinese vision of an "all inclusive, all-win" trade deal capable of advancing Asia-Pacific cooperation. The loser was the U.S.-driven, corporate-redacted, fiercely opposed (especially by Japan and Malaysia) 12-nation Trans-Pacific Partnership (TPP).

This essay by Pepe was posted on the Asia Times website yesterday sometime---and it's certainly worth reading as well.  Once again I thank reader M.A. for finding it for us.

‘Economic isolation breach of international law': Top 5 takeaways from Putin ahead of G20

Vladimir Putin says the G20 must address global imbalances together, and economic isolation, especially in the case of sanctions, which not only leads nowhere but is a crude violation of international economic law.

Here are the Russian president’s top takeaways he gave in an interview to TASS ahead of the G20 summit being held in Brisbane, Australia from November 14-15.

Putin believes the G20 is still a good and relevant platform for world leaders, however, decisions at the summit are often nothing but words. Decisions made there are only carried out when there are in line with the interests of certain global players, like the U.S.

Decisions are neglected if they don’t fit the agenda of an individual power.

This interview was posted on the Russia Today website at 10:23 a.m. Moscow time on their Friday morning---and my thanks go out to Roy Stephens once again.

Sprott Money Weekly Wrap Up

In this week's edition Eric Sprott talks about gold demand in China and India, the waning global economy, with an update on Ebola and the open interest in the precious metals.

The audio interview runs for 10:26 minutes---and it was posted on the sprottmoney.com Internet site on Friday.

Jonathan Kosares: Gold capitulation? Not likely

USAGold's Jonathan Kosares argues that any "capitulation" in the gold market is more likely to occur with the paper shorts than with the metal longs, because the "herd money" is on the short side.

Kosares' commentary is headlined "Gold Capitulation? Not Likely" and it was posted at USAGold.com Internet site yesterday---and I thank Chris Powell for wordsmithing 'all of the above.'

Deutsche Bank Says "Yes" Vote Has "Narrow But Clear Lead" in Swiss Gold Referendum as 1M GOFO Hits Most Negative Since 2001

As we explained last weekend, should the Swiss gold referendum pass successfully, the price of gold will surge. It was none other than JPM who warned that the "markets under appreciate this event", explaining that "If the referendum is passed, the Swiss National Bank (SNB) will be forced to increase reserves by around 1,500 tonnes over five years, i.e. 300 tonnes per year. This 300 tonnes per year accounts for 7.5% of annual gold demand of 4,000 tonnes per year."

Well, even as the SNB has been scrambling to make the referendum seem like a non-event, with very little chance of passing, moments ago Deutsche Bank released a piece that roundly refuted everything the Swiss Central Bank has been peddling. To wit, here is a note just out from DB's Robin Winkler---

This very interesting article appeared on the Zero Hedge website at 12:58 p.m. EST on Friday afternoon---and I thank reader M.A. once again for sending it our way.  It's worth reading, however you can forget the stuff about GOFO, as it means nothing.  The article is courtesy of reader M.A. once again.

India back to being world’s top gold consumer

India reclaimed its world’s top gold consumer crown from China as demand for jewellery surged almost 60% in the third quarter of the year, fresh data from the World Gold Council (WGC) shows.

Global demand, however, fell to its lowest in nearly five years as Chinese buying slid by a third and gold jewellery, the biggest single area of consumption, dropped 4% to 534 tonnes.

Overall, the south Asian nation —which had lost his position as the world’s No.1 gold consumer to China in 2011—bought 39% more gold in the run-up to Diwali and the start of the traditional wedding season.

The WGC said that a weakening of gold prices in rupee terms had boosted demand in India, and that confidence in the new government led by Narendra Modi had also contributed to the rise.

According to the latest withdrawal from the Shanghai Gold Exchange yesterday, gold usage in China is around 1,700 tonnes per year---and that's the imports that we know about, so I'd take these WGC figures with a big grain of salt---along with anything else they might have to say about supply and demand.  This gold-related news item appeared on the mining.com Internet site on Thursday sometime---and it's the final offering of the day from reader M.A.---and I thank him on your behalf.

¤ The Funnies

¤ The Wrap

A little while back, I commented that I believed the big drop in the price of crude oil, by far the most important commodity in the world, was set off by futures positioning on the NYMEX and other derivatives trading exchanges. Specifically, I concluded that selling by technically motivated traders over the past few months was most responsible for the sharp drop in the price of crude oil, as well as the not coincidental price drops in silver, gold, copper, palladium and platinum.  I gave the documented quantities of contracts and equivalent amounts of material that were sold and can do so again on request.

What I have seen unfold over the past 40 years has been a steady progression of futures trading overwhelming actual supply and demand as the prime influence on price. I’m not suggesting that actual supply and demand don’t matter to price, just that they have been pushed aside for extended periods by the influence of derivatives positioning. I discovered it in COMEX silver nearly three decades ago and have seen it creep into most markets currently. What I am saying is that in the “old days” (30 to 40 years ago) it was strictly supply and demand that determined price; but that we have evolved into a modern era of derivatives trading overwhelming actual supply and demand as the prime price influence. - Silver analyst Ted Butler: 12 November 2014

Today's pop 'blast from the past' dates back to November of 1963---and I had just turned 15 years young in October of that year, so this song made a huge impression on me, as did her other big hits that followed.  Songwriting duo Burt Bacharach and Hal David took Dionne Warwick's incredible voice and turned her into the superstar she rightfully deserved to be.  It was her first Top 10 hit---and the link to the youtube.com video is here.

Today's classical 'blast from the past' was composed by one Johann Nepomuk Hummel---a name that won't ring too many bells for classical music lovers, but two of his piano concertos are masterpieces---and very much of the Mozart/Chopin crossover period of the very late 1700s and very early 1800s.

He possessed a formidable musical pedigree, as his teachers included Haydn, Clementi and Mozart---and Beethoven and Mendelssohn were amongst his pupils.  I still remember where I was when I first heard one of his concertos on the radio---and within 24 hours I had the Stephen Hough recording of them in my collection.  This recording is of the B minor Op. 89 piano concerto No. 3 that he composed in Vienna in 1819.  The Stephen Hough recording is the one featured on the youtube.com video linked here---and the link to the A minor piano concerto can be found in the right sidebar.  Both are equally wonderful. 

I was more than happy to wake up late on Friday morning and find the big rallies staring me in the face when I powered up my computer---especially considering the negative price action and big volume that had preceded it before the London morning gold fix.  Here are the charts for the 'Big 6' commodities.

Note the new intraday low ticks for both platinum and WTIC.

As I mentioned in my comments below the Commitment of Traders Report further up, Ted said that there were actually two different trading days rolled into one yesterday.  The big sell-offs before the Comex open, where there was huge volume on the downside moves---followed by the short-covering rallies after that, with even bigger volume.  How it all netted out is unknown and, depending on what the price action is like on Monday and Tuesday, we may or may not find out in next Friday's COT Report, because market events on those two days may bury Friday's action.

Checking the changes in total open interest in the CME's Preliminary Report for the Friday trading session, I note that total o.i. in gold only increase by 6,168 contracts---and silver's o.i. actually declined by 1,832 contracts---which are not the sort of changes one would expect on such a volatile trading day.

However, I've learned from hard experience---and then getting smacked across the side of the head by Ted Butler---that it's not wise to trust these preliminary volume numbers, as only the COT Report tells all.

I remain cautiously optimistic about all of this, of course, but I'm not going start bouncing off the walls, or breaking out the party favours just yet, as the question still remains unanswered as to whether JPMorgan et al are going to cap these rallies at the major moving averages---those being the 50 and 200-day.  We've been down this road twice already this year, so I urge you to cool your enthusiasm until the picture becomes clearer.

I'll wait until we've got a few more trading days under our belts before I'll be a believer---and it goes without saying that I'll be watching the Sunday night open in New York with great interest.

And referring back to the COT Report once again, Ted was very happy that there was no Commercial shorting in silver during the reporting week---and he was really happy that the 'Big 8' COMEX silver shorts actually covered some of their short positions, led by JPMorgan.  He also happily pointed out that their current short position is at a new low since being forced to take over Bear Stearns at gunpoint back in March of 2008.  That leaves Canada's Scotiabank as the 'King Short' in the COMEX silver market---and probably the COMEX gold market as well, specifically in the non-U.S. bank category.

I must admit that I was expecting November to be a rather quiet month, but after yesterday's outbursts and the price volatility last week---along with the big deliveries in gold that were posted in the last couple of days---it could end up being anything but.

So we wait some more.

That's all I have for the day---and the week.

See you on Tuesday.

Ed Steer

]]>
Sat, 15 Nov 2014 09:57:00 +0000
<![CDATA[Central Banks “Managing”—That Is, Rigging—Gold “More Actively,” LBMA is Told]]> http://www.caseyresearch.com/gsd/edition/central-banks-managing-that-is-rigging-gold-more-actively-lbma-is-told/ http://www.caseyresearch.com/gsd/edition/central-banks-managing-that-is-rigging-gold-more-actively-lbma-is-told/#When:06:24:00Z "We're so far down this rabbit hole that I'm no longer sure what to expect"

¤ Yesterday In Gold & Silver

There wasn't any price activity in gold worthy of the name on Thursday, with the low price tick coming at the London open---and the high at precisely 12 o'clock noon in New York.  Nothing much to see here.

The gold price traded within a twelve dollar range yesterday, so I shan't waste the energy to look up the low and high prices.

Gold closed in New York on Thursday at $1,161.90 spot, up 20 whole cents.  Gross volume was pretty decent, but once the roll-overs out of the December contract were subtracted, it netted out to 141,000 contracts, with more than 50 percent of the total amount traded before the morning gold fix in London, which is a highly unusual state of affairs.

After the usual 6 p.m. EST sell-off on Wednesday evening, the silver price flopped and chopped around unchanged for the entire Thursday session.  Like gold, the low tick was at the London open---and the high came ten minutes after COMEX trading began in New York.  After that, the price wasn't allowed to do much.

With the silver price trading well within a two bit range, the low and high ticks aren't worth looking up, either.

Silver was closed up a half a cent at the end of electronic trading on Thursday afternoon in New York.  Net volume was only 24,000 contracts, but the roll-over activity out of the December delivery month was pretty decent---and will get heavier as the month progresses.

Both platinum and palladium reached their highs during the Zurich lunch hour yesterday---and were under choppy selling pressure after that.  Both were closed down on the day; platinum by 7 dollars and palladium by 6 dollars.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 87.85.  It sagged a bit starting around 3 p.m. Hong Kong time, with the 87.65 'low' coming around 9 a.m. GMT in London.  It didn't do much after that, closing the Thursday session at 87.77---down 8 basis points.  Nothing much to see here, either.

The gold stocks opened in positive territory---and then sagged into negative territory going into the London p.m. gold fix.  From there the rallied back into positive territory, hitting their zenith at exactly 12 noon EST when the gold price topped out.  From that point the gold prices sagged back into negative territory---and closed there, as the HUI finished down 1.87%.

The silver equities follow an almost identical price pattern, except Nick Laird's Intraday Silver Sentiment Index closed down 2.01%.

The CME Daily Delivery Report showed that a whopping 920 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  Remember that I said that, barring a surprise out of left field, November was normally a very quiet delivery month for both precious metals.  Well, that surprise out of left field just put in an appearance, as there was no hint of this in Wednesday's Preliminary Report, which is normally when you would see it first.

The only short/issuer was JPMorgan out of its client account---and the biggest long/stopper was Canada's Scotiabank with 833 of those contracts---and ABN Amro was a very distant second with 79 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed the surprise delivery, as the contracts open in the November delivery month blew out by 909 contracts to 942 contracts outstanding.  Silver's November o.i. fell by 21 contracts down to 89 contracts.

Minus the 920 contracts posted for delivery tomorrow, the November open interest now nets out to 22 contracts remaining.  Will we get another surprise 'out of left field' in what remains of the November delivery month?  Absolute nothing will surprise me going forward.

Another day---and another withdrawal from GLD.  This time it was 65,954 troy ounces.  There was also a report from SLV and, not surprisingly, an authorized participant added a whopping 2,012,354 troy ounces, which is one full day of world silver production.  One has to wonder how many Air Miles those 2,000 good delivery bars racked up in the process of getting to London.

Since yesterday was Thursday, Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the in/out data from the iShares.com website---and this is what he had to report:  "Analysis of the 12 November 2014 bar list---and comparison to the previous week's list -- 1,911,745.4 troy ounces were removed, 1,432,087.6 troy ounces were added (all to/from Brinks London).  Five bars had a serial number change."

"The bars added were from Solar Applied Materials (1.3M oz), and 4 others (all less than 52,000 oz). All appear to be freshly minted bars (new to SLV)."

"The bars removed were from Russian State Refineries (1.5M oz), Prioksky (0.2M oz), and 6 others. All were bars that had been in SLV many years."

"As of the time that the bar list was produced, it was overallocated 98.6 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

And, for the third day in a row, there were no reported sales from the U.S. Mint.

However, the mint did mention the fact that they will be selling 2014 silver eagles on an allocated basis starting on Monday---and I have a story about that in it the Critical Reads section, but if you can't wait, it's linked here.

There was decent activity in both gold and silver at the Comex-approved depositories on Wednesday.  In gold, 10,049.181 troy ounces were shipped out of HSBC USA---and precisely the same amount, to the nearest 1/1,000 of an ounce, was deposited, in Scotiabank's account.  The link to that activity is here.

In silver, nothing was reported received, but 1,386,077 troy ounces were shipped out the door.  And with the exception of JPMorgan, all the depositories had metal withdrawn.  The link to that action is here.

Here are the 6-year charts for both GLD and SLV.  The dichotomy between the two could not be more stark---and except for Ted Butler and myself, virtually nobody is talking about this, not even the 'lunatic fringe'.  You would think that any of these self-anointed silver experts would have stolen Ted's work by now [without attribution, of course] and attempted to lead the parade on this, but not a word so far.

Since today is Friday, the Shanghai Gold Exchange updated their website with their gold withdrawals for the week ending Friday, November 7.  They reported that 54.190 tonnes were taken out, which ain't too shabby---and here's Nick Laird's most excellent chart showing the change.

The next chart from Nick shows the Shanghai Gold Exchange's "Monthly Physical Gold Withdrawals"---and it will be interesting to see if they really put the 'pedal to the metal' [pun intended] for the remainder of the 2014 calendar year like they did in 2013.

I don't have a lot of stories for you today---and I'll happily leave the final edit up to you.

¤ Critical Reads

Global Stocks Rise, U.S. Futures at Fresh Record on Latest Reduction of Growth Forecasts

The relentless regurgitation of the only two rumors that have moved markets this week, namely the Japanese sales tax delay and the "surprise" cabinet snap elections, was once again all over the newswires last night in yet another iteration, and as a result the headline scanning algos took the Nikkei another 1.1% higher to nearly 17,400 which means at this rate the Nikkei will surpass the Dow Jones by the end of the week helped by further reports that Japan will reveal more stimulus measures on November 19, although with U.S. equity futures rising another 7 points overnight and now just shy of 2,050 which happens to be Goldman's revised year-end target, the U.S. will hardly complain.

And speaking of stimulus, the reason European equities are drifting higher following the latest ECB professional forecast release which saw the panel slash their GDP and inflation forecasts for the entire period from 2014 to 2016. In other words bad news most certainly continues to be good news for stocks, which in the US are about to hit another record high, with the bulk of the upside action once again concentrated between 11:00 and 11:30am.

This longish commentary was posted on the Zero Hedge website at 6:48 a.m. EST Thursday morning---and today's first story is courtesy of reader M.A.

David Stockman: Take Cover Now—-They Don’t Ring a Bell at the Top

This is getting downright stupid. After the minor 8% correction in October, the dip buyers came roaring back and the shorts got sent to the showers still another time. Earlier this morning the S&P 500 was pushing 2050——or up 12% in less than a month.

So the great con game remains in tact. The casinos run by the Fed and other central banks can’t go down for more than a few of days—until one or another central banker hints that more free money is on the way.

A few weeks ago it was James Bullard hinting at a QE extension. Next was Mario Draghi pronouncing that the whole ECB is unified behind a plan to expand its already swollen balance sheet by another $1.2 trillion. And then Haruhiko Kuroda, the certifiable madman running the BOJ, not only announced his 80 trillion yen buying scheme, but soon averred that falling oil prices—–a godsend to Japan—–were actually a threat to his mindless 2% inflation goal that might necessitate even more money printing. That is, after buying up 100% of the massive Japanese government bond market, the BOJ would not hesitate to monetize ETF’s, stocks, securitized real estate debt and, apparently, sea shells, if necessary.

Accordingly, bounteous wealth is seemingly to be had by the three second exercise of clicking  “buy” on the SPU (basket of S&P 500 stocks). Indeed, for the past 68 months running, the stock market has blown through every mini-correction, and has been traversing a near parabolic rise.

This commentary appeared on David's website yesterday sometime---and I thank Roy Stephens for his first offering in today's column.

Marc Faber Double Header

The first interview is a 12:29 minute CNBC video clip from yesterday---and the second video interview runs for 16:58 minutes---and it was posted on the goldseek.com Internet site on Thursday as well.  It's linked here.  Both are courtesy of reader Ken Hurt.

U.S. and Brussels target at least 12 banks over forex

Six banks agreed a $4.3 billion settlement with U.K., U.S., and Swiss regulators on Wednesday for allegedly attempting to manipulate the foreign exchange market. But for them and at least half a dozen other banks and their legal and public relations, the exposure is far from over as U.S. and European investigators continue to pursue cases.

The U.S. Department of Justice is investigating numerous banks, former traders, and salesmen for allegedly manipulating the $5.3 trillion forex market and overcharging customers, while evidence obtained by Europe's top competition authority, people close to the probe said, is of "startling quality."

The investigations, which are expected to play out over the next year or longer, will probably result in large fines and criminal findings from the DoJ, these people say.

The above three paragraphs are out of an article from the Financial Times of London on Thursday---and you need a subscription to read the rest.  I found it embedded in a GATA release.

Mike Maloney: Bank Bail In or Bail Out...What's The Difference?

"Just the term 'bail in' is a lie. This is something that is a marketing tool to basically...cover up a theft." - Mike Maloney

This tiny 1:19 minute video clip was posted on the hiddensecretsofmoney.com Internet site on Wednesday---and it's definitely worth a minute of your time.

Carney Sees Europe Stagnation Impact as Growth Outlook Look

Mark Carney unveiled lower U.K. growth and inflation forecasts as officials adjusted to account for “moribund” global expansion and stagnation in Europe.

“Developments in the world economy mean some of the downside risks to growth in earlier projections have crystallized,” the Bank of England governor told reporters in London today. “A specter is now haunting Europe –- the specter of economic stagnation.”

Carney spoke while presenting the BOE’s Inflation Report, where officials said annual increases in consumer prices could slow below 1 percent within months, and will return to the 2 percent target in three years. That effectively validates investors’ expectations that rate increases may not start for another year. Policy makers also cut growth forecast for the next two years.

This Bloomberg article, filed from London, showed up on their website at 5:11 a.m. Denver time on Wednesday morning---and it's something I 'borrowed' from yesterday's edition of the King Report.

Moscow gives France until end of November to deliver warship

Russia on Friday warned France of "serious" consequences unless Paris delivers by the end of this month a Mistral-class assault warship whose handover has been delayed by concerns over Moscow's role in the Ukraine crisis, a report said.

"We are preparing for different scenarios. We are waiting until the end of the month, then we will lodge serious claims," the state news agency RIA Novosti quoted an anonymous high-ranking Moscow source as saying.

The first of two mammoth Mistral helicopter carriers was supposed to be delivered on Friday according to the original deal signed in 2011 and worth 1.2 billion euros ($1.5 billion) for both vessels.

This AFP story, filed from Moscow, showed up on the france24.com Internet site at 10:15 a.m. Europe time this morning---and I thank South African reader B.V. for sliding it into my in-box shortly before I sent today's column out the door.

Spreading deflation across East Asia threatens fresh debt crisis

Deflation is becoming lodged in all the economic strongholds of East Asia. It is happening faster and going deeper than almost anybody expected just months ago, and is likely to find its way to Europe through currency warfare in short order.

Factory gate prices are falling in China, Korea, Thailand, the Philippines, Taiwan and Singapore. Some 82pc of the items in the producer price basket are deflating in China. The figures is 90pc in Thailand, and 97pc in Singapore. These include machinery, telecommunications, and electrical equipment, as well as commodities.

Chetan Ahya from Morgan Stanley says deflationary forces are “getting entrenched” across much of Asia. This risks a “rapid worsening of the debt dynamic” for a string of countries that allowed their debt ratios to reach record highs during the era of Fed largesse. Debt levels for the region as a whole (ex-Japan) have jumped from 147pc to 207pc of GDP in six years.

These countries face a Sisyphean Task. They are trying to deleverage, but the slowdown in nominal GDP caused by falling inflation is always one step ahead of them. “Debt to GDP has risen despite these efforts,” he said. If this sounds familiar, it should be. It is exactly what is happening in Italy, France, the Netherlands, and much of the eurozone.

This must read commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 8:02 p.m. GMT on Wednesday evening---and it's the second contribution of the day from Roy Stephens.

Oil Price Slide – No Good Way Out

The world is in a dangerous place now. A large share of oil sellers need the revenue from oil sales. They have to continue producing, regardless of how low oil prices go unless they are stopped by bankruptcy, revolution, or something else that gives them a very clear signal to stop. Producers of oil from U.S. shale are in this category, as are most oil exporters, including many of the OPEC countries and Russia.

Some large oil companies, such as Shell and ExxonMobil, decided even before the recent drop in prices that they couldn’t make money by developing available producible resources at then-available prices, likely around $100 barrel. See my post, Beginning of the End? Oil Companies Cut Back on Spending. These large companies are in the process of trying to sell off acreage, if they can find someone to buy it. Their actions will eventually lead to a drop in oil production, but not very quickly–maybe in a couple of years.

So there is a definite time lag in slowing production–even with very low prices. In fact, if US shale production keeps rising, and Libya and Iraq keep work at getting oil production on line, we may even see an increase in world oil production, at a time when world oil production needs to decline.

At the same time, demand doesn’t pick up quickly as prices drop. We are dealing with a world that has a huge amount of debt. China in particular has been on a debt binge that cannot continue at the same pace. A reduction in China’s debt, or even slower growth in its debt, reduces growth in the demand for oil, and thus its price. The same situation holds for other countries that are now saturated with debt, and trying to come closer to balancing their budgets.

This excellent and thoughtful essay put in an appearance on the ourfiniteworld.com Internet site back on November 5.  I was saving it for Saturday, but it dovetailed so nicely with the previous story, that I thought I'd stick in here.  It's definitely worth reading---and I thank reader U.D. for passing it around on Wednesday.

Interview with Henry Kissinger: 'Do We Achieve World Order Through Chaos or Insight?'

Henry Kissinger is the most famous and most divisive secretary of state the U.S. has ever had. In an interview, he discusses his new book exploring the crises of our time, from Syria to Ukraine, and the limits of American power. He says he acted in accordance with his convictions in Vietnam.

He seems more youthful than his 91 years. He is focused and affable, but also guarded, ready at any time to defend himself or brusquely deflect overly critical questions. That, of course, should come as no surprise. While his intellect is widely respected, his political legacy is controversial. Over the years, repeated attempts have been made to try him for war crimes.

From 1969 to 1977, Kissinger served under President Richard Nixon and Gerald Ford, first as national security advisor and then as secretary of state. In those roles, he also carried partial responsibility for the napalm bombings in Vietnam, Cambodia and Laos the killed or maimed tens of thousands of civilians. Kissinger also backed the putsch against Salvador Allende in Chile and is accused of having had knowledge of CIA murder plots. Documents declassified just a few weeks ago show that Kissinger had drawn up secret plans to launch air strikes against Cuba. The idea got scrapped after Democrat Jimmy Carter was elected in 1976.

Nevertheless, Kissinger remains a man whose presence is often welcome in the White House, where he continues to advise presidents and secretaries of state to this day.

This 2-page essay appeared on the spiegel.de Internet site yesterday some time---and I thank reader M.A. for his second contribution to today's column.  It's definitely worth reading, but keep an open mind, as Henry is a card-carrying member of the New World Order crowd---and a war criminal.

U.S. Mint plans resumption of sales November 17 for American Eagle silver bullion coins

The United States Mint expects to have more than 1 million 2014 American Eagle silver bullion coins available Nov. 17 when it resumes sales to authorized purchasers on an allocation basis.

The authorized purchasers were notified by Mint officials Nov. 10 concerning the sales resumption.

Mint officials announced Nov. 5 that sales were suspended because the available inventory was depleted. The U.S. Mint has experienced significantly increased investment demand over the past several weeks. Through Nov. 10, the Mint recorded cumulative sales of 39,381,000 of the 1-ounce, .999 fine silver bullion Eagles.

U.S. Mint officials did not disclose whether all of the production to be available Nov. 17 will be from West Point Mint output or include production from the San Francisco Mint, which has been augmenting West Point production.

This news item, which I linked at the top of this column, was posted on the coinworld.com Internet site on Remembrance Day---and I thank reader Tolling Jennings for sending it our way.

Recordings of New Orleans proceedings, from Greenspan to GATA, are on sale

The entire proceedings of last month's New Orleans Investment Conference, from the interviews with former Federal Reserve Chairman Alan Greenspan to the presentations of GATA Chairman Bill Murphy and your secretary/treasurer, including the latter's debate with Casey Research founder Doug Casey about gold price suppression, are now available for purchase on compact disc, DVDs, and streaming video.

Not only that, but you can choose to buy the whole works or just the presentations of special interest to you -- and the conference has generously offered to share with GATA the revenue generated by purchases by GATA supporters.

To learn more and to help GATA earn a little money here, please use this Internet link.

Ted Butler urges silver miners to stand up and fight market rigging

Silver market analyst Ted Butler, the original exposer of metals market rigging, is urging silver mining companies to complain to market regulators in the United States, not in any expectation of regulatory action, but rather to send a signal to the rest of the world.

Butler's appeal, made in his proprietary newsletter on Wednesday, is excerpted in the clear in Thursday's edition of GATA board member Ed Steer's Gold and Silver Daily letter at Casey Research.

Central banks 'managing' -- that is, rigging -- gold 'more actively,' LBMA is told

Bullion Vault research director Adrian Ash this week called attention to what may be the most relevant remark coming out of the London Bullion Market Association's conference in Lima, Peru.

It's the assertion by the market operations director of the Banque de France, Alexandre Gautier, that central banks now are managing their gold reserves "more actively," a remark conveyed to Ash by a colleague attending the conference. Ash wrote about it Tuesday in his daily commentary at Bullion Vault.

Gautier told the LBMA conference in Rome in September 2013 that the Banque de France is trading gold for its own account "nearly on a daily basis" and is "active in the gold market for central banks and official institutions".

This extensive commentary by Chris Powell was posted on the gata.org Internet site yesterday---and is definitely worth your while.

Adrian Ash: Good news for gold bulls from the near-bears of the LBMA

Bullion Vault research director Adrian Ash remarked last night on the pervasive bearishness reported from the London Bullion Market Association conference in Lima, Peru. "When everyone's out, or at least miserable," Ash writes, "there's only one way for prices to head. So says the 'contrarian' school of long-term investing. Find an asset that's hated and deeply oversold. Then fill your boots."

He adds pretty sagely, "People tend to predict what they've just seen."

Ash's commentary is headlined "Good News for Gold Bulls from the LBMA's Near-Bears" and it's posted at Bullion Vault.  I thank Chris Powell for wordsmithing the above paragraphs of introduction---as I stole all this from a GATA release yesterday evening.

Swiss Gold Initiative continues to frighten the Financial Times

From rescuing Switzerland's biggest bank during the financial crisis to stemming a dramatic appreciation of the franc, the Swiss National Bank has faced its fair share of challenges in recent years. Now another is looming: "Save Our Swiss Gold."

That is the name of a radical initiative that the Swiss public will vote on November 30 that would drastically change how the central bank functions. If accepted, it would force the SNB to hold at least 20 per cent of its assets in gold; ban it from ever selling the metal; and require all its gold to be stored in Switzerland.

The initiative is the latest in a string of proposals fuelled by mounting popular anxiety in Switzerland about the 8 million-strong nation's ability to control its affairs in a turbulent world.

This Financial Times story, filed from Zurich, appeared on their website on Thursday sometime---and its actual headline reads "Anxious Gold Bugs Swarm Switzerland's Central Bank".  The above three paragraphs are all of the story that is posted in the clear---and you'll need a subscription to read the rest.

Putin stockpiles gold as Russia prepares for economic war

Russia has taken advantage of lower gold prices to pack the vaults of its central bank with bullion as it prepares for the possibility of a long, drawn-out economic war with the West.

The latest research from the World Gold Council reveals that the Kremlin snapped up 55 tonnes of the precious metal - far more than any other nation - in the three months to the end of September as prices began to weaken.

Vladimir Putin's government is understood to be hoarding vast quantities of gold, having tripled stocks to around 1,150 tonnes in the last decade. These reserves could provide the Kremlin with vital firepower to try and offset the sharp declines in the rouble.

The contents of the second paragraph is pure bulls hit, as China took in way more gold than that, but the author of this article rather conveniently overlooked that fact.  For that reason alone, I'd be cautious of the other 'facts' in here, if you decide to read it, that is.  There's nothing really new in this article from The Telegraph, as most of this data has appeared in my column under different headlines over the last few weeks or so.  But so many subscribers sent it to me, I finally caved and decided to post it.  The first person through the door with it was reader 'h c'.

ISIS Unveils Its New Gold-Backed Currency to Remove Itself From "The Oppressors' Money System"

It appears the rumors are true. Islamic State is set to become the only 'state' to back its currency with gold (silver and copper) as it unveils the new coins that will be used in an attempt to solidify its makeshift caliphate. ISIS says the new currency will take the group  out of "the oppressors' money system."

Of course this will mean more physical demand - along with Russia and China - and so more price suppression by the West.

This very interesting precious metals-related story was posted on the Zero Hedge website at 3:18 p.m. EST Thursday afternoon---and I thank reader 'David in California' for passing it around.

Rise of Swiss gold exports to India raises questions

Switzerland is one of the world’s biggest centres for refining gold and exports significant amounts to India - one of the world’s biggest importers. How much of this contributes to trade-based money laundering? 

Gold imports by India have doubled in the past 15 years, even though the price of gold has climbed and the rupee has strengthened. In this context, a sharp rise in the export of gold from Switzerland to India has raised eyebrows, with concerns of money being laundered through gold. 

There is a perception among experts that the gold economy in India is significantly based on unaccounted resources. Dev Kar is the chief economist at Global Financial Integrity, a non-profit Washington-based group that tracks illicit financial flows in the world.

I'm not sure what to make of this story, as it appeared out of thin air.  I've never heard of 'trade-based money laundering' before when imports to India from Switzerland have been discussed---and the question that came to my mind was "Why Now?"  This article appeared on the swissinfo.ch Internet site at 11:00 a.m. Europe time yesterday---and I thank South African reader B.V. for finding it for us.  If you read it, do so with open eyes and an open mind.

Indian gold curbs still possible after inconclusive policy meeting

India's Finance Ministry and central bank will reconvene in a day or two after failing to come to a decision on Thursday over whether to restrict gold imports after inbound shipments surged in the past two months, pressuring the country's trade deficit.

October shipments to India, the world's No.2 gold consumer behind China, jumped to about 150 tonnes from less less than 25 tonnes a year earlier and 143 tonnes in September, a finance ministry official said on Thursday.

Measures under discussion would restrict imports by private trading firms, which started importing gold around the middle of this year after being barred from doing so from July 2013, two other sources with knowledge of the matter said earlier.

This Reuters story, co-filed from New Delhi and Mumbai, showed up on their Internet site at 8:58 a.m. EST on Thursday morning---and I found it on the gata.org Internet site.  It's worth reading.

¤ The Funnies

Here's how things looked in the town of Pāhoa on the 'Big Island' Hawai'i yesterday---and here's a photo along with the description from the HVO website---"The small breakout near the solid waste transfer station began spilling into the truck access road that loops around the transfer station. This road is quite a bit lower than the transfer station buildings, and it will likely take a few days for it to fill up, if the breakout remains active.The 'click to enlarge' feature is a big help here---and don't forget to read the sign!









¤ The Wrap

There is a reason why the regulators seem to be finding that the big banks have manipulated every market except silver (and gold). In all the new findings and admissions of wrongdoing by the banks, there was no prior strong record of allegations that the banks were up to no good. Because of this, the regulators haven’t been accused of overlooking and missing crimes that they should have caught long ago, even though the crimes couldn’t have just started recently.

Another key difference to why the regulatory charges of manipulation in Libor and foreign exchange can’t be made in COMEX silver and gold is that damage to outsiders is too easy to prove in the case of the precious metals. This means the flood of private lawsuits that would emerge should the CFTC find what most everyone knows already (that silver and gold are manipulated) would swamp the banks and the CME. Can’t have that. - Silver analyst Ted Butler: 12 November 2014

It was another 'nothing' sort of day in the precious metals yesterday.  I'm still trying to figure out why volumes were so high in Far East and early London trading yesterday, as the price activity didn't warrant that sort of volume, although it's a reasonable bet that the price activity would have been different if the HFT boyz and their algorithms hadn't been around at that time.  Almost all of the roll-over activity occurred after the London a.m. gold fix was put to bed.

Here are the 6-month charts for gold, silver, copper, natural gas and crude oil.

As you are more than likely aware, crude oil set a new low for this move down---and natural gas has turned lower with a vengeance.  It's also a good bet that the Commercial traders are gleefully gorging on Managed Money traders as they dump longs and/or go short in these two key commodities.

And as I write this paragraph, the London open is about twenty minutes away---and it appears the HFT boyz and their algorithms have been hard at it in all four precious metals at the most illiquid time of day---on a Friday afternoon as the Far East trading session was winding down.

At their lows, which came shortly before 3 p.m. Hong Kong time, gold was down more than 12 bucks, silver [JPM's enfant terrible] was down 45 cents---that's 3 percent at this price---platinum down 9 bucks and palladium down 7.  Gold's net volume currently sits at 33,000 contracts---and silver's net volume is way up there at 9,700 contracts, which is huge, so it was obvious that a boat load of longs were dumped, or there was massive shorting going on.

Only a tiny percentage of the volume was roll-over related, so that makes it obvious that it was HFT trading that set off the selling binge.

The dollar index hit its Far East 88.07 high at precisely 2 p.m. Hong Kong time, but has now backed off to 87.98---up 20 basis points at the moment.

Today we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and like I've said a couple of times this week already, I'm not exactly sure what to expect.  But whatever the numbers are, I'll have them for you tomorrow.

With the fear of deflation everywhere these days, there's always a sure cure for it if the powers-that-be really want to reverse the situation.  All they have to do is take their foot off the commodities complex in the COMEX futures market and let nature take its course---and we'd have commodity inflation in short order, like in days or weeks.  From there it wouldn't take long to spread into the finished goods sector.

Of course the flip side to that is that the stampede would be on from the paper asset side of the street to the physical asset side---and a melt-down in all things paper would be upon us.  Whether that is in the works or not remains to be seen, but gold/commodities card is the only one that the central banks have left---and the U.S. banks, being loaded up on the long side of all of them, are set to benefit the most, if this scenario comes to pass---either over a period or time, or as part of a financial 'reset.'

Frankly, we're so far down this rabbit hole that I'm no longer sure what to expect---and Chris Powell's quote from back in April of 2008 rings even more true today than it did back then, because "there are no markets anymore---only interventions."

But with China gobbling up 50-odd tonnes of gold a week---and silver well below its cost of production for the primary producers of the metal---it's only a matter of time before the situation resolves itself on its own.  The only question remaining is who will be left standing when it does.

And as I sent today's missive out the door at 5:15 a.m. EST, I see that all four precious metals have rallied off their current lows somewhat. 

Both gold and silver are still down on the day at the moment---and platinum and palladium are back to unchanged.  Net gold volume is now about 44,000 contracts, with decent roll-over activity---and silver's net volume is 12,500 contracts with still no roll-over volume to speak of.

The lion's share of today's volume so far was obviously associated with the co-ordinated sell-offs before the London open---and there hasn't been much net volume in either gold or silver since.  I would assume that is the case in the other two white metals as well. The dollar index has faded a bit more in the last two and a half hours of trading---and is now up only 9 basis points.

Today is Friday---and after the way the trading day has started, you should steel yourself for any eventuality when trading begins on the Comex at 8:20 a.m. EST.

See you here tomorrow.

Ed Steer

]]>
Fri, 14 Nov 2014 06:24:00 +0000
<![CDATA[Swiss Regulator: “Clear Attempt to Manipulate Precious Metals”—“Particularly Silver”]]> http://www.caseyresearch.com/gsd/edition/swiss-regulator-clear-attempt-to-manipulate-precious-metals-particularly-si/ http://www.caseyresearch.com/gsd/edition/swiss-regulator-clear-attempt-to-manipulate-precious-metals-particularly-si/#When:06:10:00Z "The four PMs are still hugely oversold"

¤ Yesterday In Gold & Silver

The gold price traded a few dollar either side of unchanged on Wednesday during the Far East and early London trading session.  The smallish rally that began 20 minutes before the Comex open ran into the usual not-for-profit sellers at 8:30 a.m. EST.  It was all down hill from there, with the low tick of the day coming shortly after the 1:30 p.m. Comex close.  The subsequent rally cut the  COMEX loses in half.

The high and low ticks were recorded by the CME Group as $1,169.40 and $1,156.50 in the December contract.

Gold closed yesterday at $1,161.70 spot, down $1.20 from Tuesday's close.  It would have performed better if JPMorgan et al hadn't put in an appearance at 8:30 a.m. EST yesterday morning.  Gross volume was well in excess of 200,000 contracts, as we're well into roll-over process out of the December delivery month, but it all netted out to 127,000 contracts, with over a third of that amount coming before the London a.m. gold fix.  After that, the net volume fell off to next to nothing.

After the usual down tick at the New York open at 6 p.m. EST on Tuesday evening, the silver price didn't do much until shortly after 2 p.m. Hong Kong time, which may have been the high of the day.  Then it chopped lower to its low tick, which appeared to come around 1 p.m. GMT---twenty minutes before the COMEX open.  Silver managed to rally back to pennies above unchanged by 12:30 p.m. in New York, but then got sold down into the 1:30 p.m. COMEX close.  After that it didn't do a thing.

The low and high price ticks for silver were recorded as $15.545 and $15.765 in the December contract.

Silver finished the Wednesday session at $15.665 spot, down 3.5 cents from Tuesday's close.  Like gold, gross volume was pretty high, but it all netted out to only 20,500 contracts, with about 40 percent of that amount coming before the London a.m. gold fix, so there was no net volume worth mentioning after that.

The platinum price action was very similar to both gold and silver---and platinum was closed well off its high once again, finishing the Wednesday session up 3 bucks.

Palladium traded flat until around 1:30 p.m. Hong Kong time---and then rallied steadily until its high price spike which occurred shortly after the COMEX open.  By the 1:30 p.m. EST COMEX close, the price had been sold back down to unchanged and, like silver, it traded ruler flat into the 5:15 p.m. electronic close---finishing the day up 2 whole dollars.

The dollar index closed late on Tuesday afternoon at 87.59.  It's low tick of 87.40 came minutes before the London open on their Wednesday morning---and the 87.89 high came five minutes or so after the 1:30 p.m. EDT COMEX close.  From there it sold off a handful of basis points, closing at 87.85---up 26 basis points on the day.

The gold stocks traded in positive territory up until minutes before 11:30 a.m. EST.  From there they slid into the red, hitting their low around 1:35 p.m.---and minutes after the Comex close, at the same time that the dollar index hit its zenith.  The gold stocks managed to eke out a tiny gain in the last few minutes of trading, as the HUI closed up 0.08%, which is basically unchanged.

The silver equities had a chart pattern that was almost a carbon copy of what happened with the gold stocks, except they couldn't squeeze a positive close, as Nick Laird's Intraday Silver Sentiment Index closed lower by 0.69%.

The CME Daily Delivery Report showed that zero gold and 31 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The short/issuer on all of them was Jefferies---and the long/stopper on all of them was Canada's Scotiabank.

The CME Preliminary Report for the Wednesday trading session showed that there are 34 gold contracts still open in November, up 5 contracts from Tuesday's report.  Silver's November o.i. is unchanged at 110 contracts---minus the 31 contracts to be delivered tomorrow that I mentioned in the previous paragraph.

There was another withdrawal from GLD yesterday.  This time an authorized participant took out 57,664 troy ounces.  And as of 9:35 p.m. EST yesterday evening, there were no reported changes in SLV.

The good folks over at the shortsqueeze.com Internet site finally got around to updating the short positions for both GLD and SLV---late, to be sure, but better late than never.   This report is for the period October 16 to October 31.  During that time, the short position in SLV declined by 1,795,000 shares/troy ounces, or 10.79%.  The short position in GLD dropped as well---by 45,160 troy ounces---or 2.90%.

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

And also for the second day in a row, there was little in/out activity at the Comex-approved depositories.  In gold, nothing was reported received---and 3,225 troy ounces were shipped out.  In silver, there was nothing received either---and only 185,515 troy ounces shipped out the door.  No need to link this activity.

I note that First Majestic Silver "Subsequent to quarter end, the Company sold all 934,000 ounces of silver that it held over from the third quarter for an average price of $17.29 per ounce increasing the cash balance by $16.1 million."

I also note that Endeavour Silver who, along with First Majestic Silver, reported their less-than-stellar third quarter results the other day---mentioned that "Bullion inventory at quarter-end included 523,526 oz silver and 937 oz of gold."  One has to wonder if they still hold this, or have they gone the First Majestic route as well?

As usual, silver analyst Ted Butler came out with his mid-week commentary yesterday---and he had something to say to all the primary silver producers out there that are prepared to listen and save themselves before they go bankrupt---and take all their shareholders, including me, with them.

I never asked his permission to reprint what he had to say, but after writing the comments about First Majestic and Endeavour above, I thought I'd include this lengthy commentary---so I'll be ready for an ear full when I talk to him later today, but this is important enough that it should be posted in the public domain.

I, like you you, have stuck by the silver miners through thick and thin, even though I've discovered over the years that these silver miners [along with their golden brethren] don't give a flying #%@# about any of their stockholders---including you or me.  As I've said before on several occasions, if I do manage to get to a position where I can sell their equities for the prices that they should be selling for, I'll never own another mining share in my entire life---and for good reason.

Here's what Ted had to say---

"There does seem to be a budding reaction building among the leaders of the primary silver miners to the COMEX action of depressing silver prices, namely a recognition that the continued existence of their enterprises is threatened. This has long been recognized by the shareholders of mining stocks and is reflected in the prices of the shares. An intelligent reaction by the primary silver miners to the artificial price-setting on the COMEX could have a profound influence in hastening the coming resolution and in ending the continuing silver price suppression. But what’s the most intelligent reaction by the primary silver miners at this time?

"While understandable, withholding production alone is not the best way of fighting back, simply because the extremely low price of silver is not caused by overproduction, but by COMEX dealings. And forget about any illegal cartel of silver miners. As I’ve suggested previously, the best thing for the primary silver miners to do, either individually or collectively, is to openly petition the regulators to address the price manipulation on the COMEX. But wait a minute – didn’t I just say that there would never be a regulatory resolution? Yes, I most certainly did and I still believe that to be true. Please hear me out.

"The primary silver miners (the byproduct producers aren’t necessarily excluded either) have to go the regulators, even if the regulators will do nothing, because it’s the right thing to do. In fact it’s the only practical approach the miners can take. Petitioning the regulators is the only legitimate action the miners can take (although I am always open to other suggestions). Forget low-cost, my approach is no cost to the miners. Further, shareholders would applaud any mining leader who took this approach.

"Most importantly, the miners have a responsibility to adopt such an approach for the simple reason that they have the most legitimate reason for complaining about the COMEX price setting. It is this legitimacy that makes the silver miners the perfect candidates to petition the regulators. Miners are not speculators or market analysts desirous of higher prices; they have a legal right to expect the level playing field of a non-manipulated price. Producers of every product hold important protections against dumping and artificial price restraints.

"But why should the miners petition the regulators if the regulators will do nothing?  Because of the message that will send to the rest of the world. Try to imagine the potential reaction in the investment world to news that a silver miner or group of miners asked the regulators to investigate evidence of manipulation? It is one thing for an Internet analyst (me) to make such allegations, but quite another for a legitimate producer to do the same. It’s all about legitimacy. It is well-known that in establishment media circles the allegations of a silver (and gold) manipulation is populated by conspiracy types and that’s a big reason the scam has lasted so long. But if a silver miner or miners the allegation, it just might prompt some of the establishment types to actually look at the evidence, something none have done to this point.

"The only thing a silver miner must be careful about in adopting an approach of openly petitioning the regulators to address the goings on in COMEX dealings is to stick to the facts and don’t say anything wrong. Unfortunately, there are an incredible amount of misstatements of fact regarding the COMEX’s role in setting silver prices that a miner repeating them will reduce any petition to a fool’s errand. Ego aside, I don’t think I’ve ever made an error when petitioning the regulators and it is this careful approach that has made me immune from a counter reaction in calling JPMorgan and the CME market criminals. Of course, I would assist any miner desiring to petition the regulators. - Silver analyst Ted Butler: 12 November 2014

[Note: the bolding and underlining is mine. - Ed]

Please feel free to send Ted's commentary to any silver mining company that you feel might be interested in higher silver prices.  You should even send this to The Silver Institute, even though it will be for naught, as they are not at all interested in helping their members in this regard.  Here's the link to their "Contact Us" page.

I have very few stories for you today---and I'm quite happy about that.  I hope you'll find one or two from the list below that are worth reading.

¤ Critical Reads

Russell Napier Declares November 16, 2014 The Day Money Dies

On Sunday in Brisbane the G20 will announce that [large] bank deposits are just part of commercial banks’ capital structure, and also that they are far from the most senior portion of that structure. With deposits then subjected to a decline in nominal value following a bank failure, it is self-evident that a bank deposit is no longer money in the way a banknote is. If a banknote cannot be subjected to a decline in nominal value, we need to ask whether banknotes can act as a superior store of value than bank deposits? If that is the case, will some investors prefer banknotes to bank deposits as a form of savings? Such a change in preference is known as a "bank run."

Each country will introduce its own legislation to effect the ‘ bail-in’ agreed by the G20 this coming weekend. The consultation document from the UK’s Treasury lists the following bank creditors who will rank ABOVE depositors in a ‘failing’ financial institution.

This commentary appeared on the Zero Hedge website at 12:09 p.m. on Wednesday---and I thank reader "Michael G" for sharing it with us.

Gas to average under $3/gallon in 2015, government says

The average price of gasoline will be below $3 a gallon in 2015, the Energy Department predicted Wednesday. If the sharply lower estimate holds true, U.S. consumers will save $61 billion on gas compared with this year.

Economists say lower gasoline prices act like a tax cut, leaving more money for consumers to spend on other things. Consumer spending is 70 percent of the U.S. economy.

The department's Energy Information Administration predicted in its most recent short-term energy outlook that drivers will pay $2.94 per gallon on average in 2015, 45 cents lower than this year.

This AP story was picked up by the msn.com Internet site yesterday---and it's courtesy of West Virginia reader Elliot Simon.

Forex scandal: How to rig the market

The foreign exchange market is not easy to manipulate.

So how do you make currency prices change in the way you want?

Traders can affect market prices by submitting a rush of orders during the window when the fix is set. This can skew the market's impression of supply and demand, so changing the price.

This might be where traders obtain confidential information about something that is about to happen and could change prices. For example, some traders shared internal information about their clients' orders and trading positions.  The traders could then place their own orders or sales in order to profit from the subsequent movement in prices.

This article appeared on the bbc.com Internet site at 9:30 a.m. EST yesterday---and it's courtesy of South African reader B.V.

Ukraine out in the cold this winter without coal from Russia, Donbass – Energy Minister

Ukraine doesn’t see other options than to buy gas from Russia, or coal from the self-proclaimed Donetsk People’s Republic, to keep the country warm this winter, said Yury Prodan Ukrainian Energy and Coal Industry Minister.

"South Africa has refused to maintain further deliveries of coal to us. A new contract can be signed in at least a month and a half. We have no other choice but to turn to Russian suppliers and purchase their coal. The situation with coal supply is threatening. Energy security is at risk," said Prodan at a government session Wednesday.

Ukraine now has just 1.7 million tonnes of coal reserves, which is critically low.

“There is a risk we won’t pull through the autumn and winter, but we continue to look for a way out,” he said.

This news item put in an appearance on the Russia Today website at 5:06 p.m. Moscow time on their Wednesday afternoon, which was 9:06 a.m. EST.  It's the first contribution of the day from Roy Stephens---and it's worth your while.

Donetsk Won’t Supply Coal to Ukraine Until Shelling Ends

The administration of the self-proclaimed Donetsk People's Republic says it will not supply coal to Kiev until it stops its military operations in the republic, the Energy Minister of the republic told journalists on Wednesday.

“There is an ongoing war and we cannot supply coal to those who are shelling us,” said the minister.

Besides, he added, Kiev has blocked the accounts of the state mines within the republic and has not paid miners’ salaries since July.

“Let them unblock the accounts first and pay off all the debts and then we will start talking,” he added.

I don't know how you feel about it, but this sounds reasonable enough to me, dear reader.  This brief news item appeared on the sputniknews.com Internet site at 6:11 p.m. Moscow time yesterday evening---and it's certainly worth reading as well.  I thank Roy Stephens for this article.

Moscow slams NATO’s accusations of invasion in Ukraine as groundless

Russia has denied NATO claims that its army has crossed into eastern Ukraine in the past few days, calling them groundless, the Defense Ministry said.

“We have stopped paying attention to the groundless accusations made by NATO’s Supreme Allied Commander in Europe, US General Philip Breedlove, of the ‘observed’ Russian military columns allegedly invading Ukraine,” said Defense Ministry official representative, General-Major Igor Konashenkov on Wednesday.

He gave a reminder of earlier and similar NATO claims, which have not been backed by any evidence.

“[We have] repeatedly stressed that there was and is no evidence supporting Brussels’ regular trumpeting over the alleged presence of Russian forces in Ukraine,” Konashenkov said.

The propaganda war against Russia continues unabated.  This Russia Today article showed up on their Internet site at 5:12 p.m. Moscow time on their Wednesday afternoon---and once again my thanks go out to Roy Stephens for bringing it to our attention.  It, too, is worth reading.

‘Ukraine, West wage information war against us’ – Russians

The overwhelming majority of Russians think that Ukraine and Western nations are conducting a coordinated and hostile propaganda campaign against their country, a recent poll shows.

In the research conducted by pollsters the Levada Center in late October, 83 percent of respondents agreed that Ukraine was conducting an information war against Russia. Fifty-five percent said they were absolutely sure that this was true, and 29 percent said that this was the most likely explanation for the current situation. Only 8 percent of Russians disagreed with another 9 percent not offering an opinion.

A question concerning an anti-Russian information campaign by Western nations yielded approximately the same results – 54 percent of those interviewed were absolutely sure that it is taking place, and 29 percent said they were somewhat sure. Four percent answered that they could not see any anti-Russian campaign on the part of the West and 9 percent remained undecided.

At the same time, about a quarter of respondents think that Russia is also waging an information war against Ukraine and the West. Thirteen percent thought that this was the right thing to do, given the current situation, meanwhile 11 percent disapproved.

This interesting news item was posted on the Russia Today website at 1:54 p.m. yesterday afternoon Moscow time---and it's the final offering of the day from Roy Stephens.

How Putin is Winning the "New Cold War"

The Americans will relentlessly try to subvert Russia as it is the only country that stands between the United States and world domination. However, Putin is a judoka who knows how to use his opponent’s force against the opponent itself.

There are 7.2 billion people in this world but the United States fears only one man – Vladimir Putin. That’s because on virtually every front of the new Cold War, the Russian President is walloping the collective challenge of the West. Fear can make you do strange things. Forbes magazine has named Putin as the most powerful person on the planet for the second year running.

It is said about the Russians that they take a long time to saddle their horses but they ride awfully fast. After slowly nursing the collapsed Russian economy back to health, Putin is now going for broke. In Syria, Crimea and Ukraine, the West has melted away at his approach and has faced humiliating setbacks. In the field of energy, it will be Russian – not western – pipelines that will dominate the Eurasian landmass.

More than any other leader, the Russian President by virtue of his KGB experience understands how the United States operates. The American modus operandi – in sync with the British – is to organise coups, rebellions and counter revolutions in countries where nationalist leaders come to power. Iran, Chile, Ecuador, Venezuela, Panama and Ukraine are the classic examples.

This absolute must read essay, especially for all students of the New Great Game, was posted on the Russia Beyond the Headlines website back on November 8---and I thank reader B.V. for bringing it to my attention---and now to yours.  I may have posted this before, but I can't remember---and I really don't have the time to check, as I'm way behind with today's column.

28 Kuwaitis renounce U.S. citizenship

Manama: Banking sources in Kuwait said that 28 Kuwaitis with dual nationalities have informed the competent authorities they wanted to renounce their U.S. citizenship.

The move was attributed to their wish to avoid paying taxes as required by the Foreign Account Tax Compliance Act (FATCA) that targets tax non-compliance by U.S. citizens with foreign accounts.

The act that was passed as law in March 2010 and came into effect in July this year forces the world’s banks to report information to the U.S. Internal Revenue Service (IRS) about their customers who hold US citizenship or a green card in order to ensure they file tax returns.

The law, initially intended to track and catch money launderers, is now affecting all U.S. citizens and green card holders, including Kuwaitis who have the U.S. citizenship even though they do not have any business in the U.S. or do not earn money from a U.S. company.

This news item appeared on the gulfnews.com Internet site at 2:08 p.m. Gulf Standard Time [GST] on November 3---and I thank Swiss reader V.G. for sending it along.

Hong Kong to scrap daily yuan conversion limit to boost stock investment

Hong Kong will scrap the daily 20,000 yuan ($3,264) conversion limit for residents from Monday when a landmark scheme to link the city's stock market with Shanghai is launched, facilitating investment flows into China's stock market.

Regulators said this week the cross-border share trading scheme would start on Monday, a crucial step in China's efforts to open its capital markets and to allow Hong Kong residents to choose from a wider menu of yuan-denominated assets apart from bonds.

"The removal of the daily conversion limit will facilitate Hong Kong residents' participation in the Shanghai-Hong Kong stock connect as well as other investments and transactions denominated in the yuan," Norman Chan, chief executive of the Hong Kong Monetary Authority, told reporters.

This Reuters article, filed from Hong Kong, was posted on their website at 12:57 a.m. EST yesterday morning---and it's another contribution from Elliot Simon.

A final purge to $700? What gold bulls' surrender might look like

To some, it’s the only true money; to others a near-useless mineral. Which means that gold is always carried along currents of investor emotion. 

So when - at what price – might gold’s fans feel sufficiently demoralized by its relentless decline to surrender in a climactic selling purge?

With gold near $1,160 and down around 40% from its 2011 high above $1,900 per troy ounce, the gold bulls’ most ardent arguments have dissipated or even been discredited: Inflation is dormant, the U.S. dollar on the rise, the federal government is solvent and modern civilization abides.

At this point in a bear market, attention turns toward anticipating what “capitulation” might look like – that phase when remaining loyalists surrender hope and liquidate in disgust.

It's not often that I will stoop to posting such garbage, but this is the kind of bulls hit you get when the person writing the story knows nothing about what he's talking.  $700 gold you ask???  Not a chance.  Read this Yahoo Finance story at your own risk---and it's courtesy of Orlando, Florida reader Dennis Mong.

Bud Conrad: 'Paper gold' and its effect on the gold price

"Casey Research's chief economist, Bud Conrad, reports that the gold futures market on the New York Commodity Exchange is so concentrated that 98.5 percent of the gold delivered to the market last month came from only three banks -- Barclays, Bank of Nova Scotia, and HSBC -- and 98 percent of the deliveries were taken by just one bank, Barclays."

""The opportunity for distorting the price of gold in an environment with so few players is obvious," Conrad writes. "Barclays knows 98 percent of the buyers and is supplying 35 percent of the gold.""

"Of course the opportunity for gold market rigging is not yet obvious to the founder of Casey Research, Doug Casey, who argues that all markets are manipulated, that it's no big deal, that central banks have no interest in gold, and it wouldn't matter if they did have any interest because they're all irrelevant anyway. But then Conrad does the research at Casey Research and Casey merely supplies the ideology and opinions, and if the research doesn't fit the ideology and opinions, it's irrelevant too."

The above paragraphs of introduction are what Chris Powell had to say in his GATA release regarding this commentary by Bud.  His report is headlined "'Paper Gold' and Its Effect on the Gold Price" and it's posted at the Casey Research Internet site.

Clear Attempt to Manipulate Precious Metals Benchmarks at UBS, FINMA Says

Swiss regulator FINMA said on Wednesday that it found a "clear attempt" to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS.

The benchmark known as the gold "fix" is used to ascertain reference prices twice daily for the precious metals industry. Along with other precious metal benchmarks, it has come under increased regulatory scrutiny since the Libor manipulation scandal broke in the foreign exchange market in 2012.

"The behaviour patterns in precious metals were somewhat similar to the behaviour patterns in foreign exchange," FINMA director Mark Branson said in a conference call with journalists.

He said that as UBS has precious metals and foreign exchange desks under combined leadership, it was not surprising to find similar behaviour.

This Reuters article, filed from London, showed up at 11:59 a.m. EST yesterday morning---and I found it embedded in a GATA release.   I note that the 'thought police' over at Reuters have bestowed a new headline on this article, as it now reads "Swiss regulator flags attempt to manipulate bullion benchmarks".  It's definitely worth reading.

Swiss Regulator: “Clear Attempt to Manipulate Precious Metals”…“Particularly Silver”

Further proof of manipulation of gold and silver prices - if any were needed - came overnight as  Switzerland’s financial regulator (FINMA) found “serious misconduct” and a “clear attempt to manipulate precious metals benchmarks” by UBS employees in precious metals trading, particularly with silver.

This commentary by Mark O'Byrne over at the goldcore.com Internet site yesterday was a must read that 'David in California' sent our way.  I stole the headline from the Zero Hedge article on this.

Would you die on your feet or your knees -- or even win?

Gold mining companies that haven't already committed themselves to die quietly, and any of their shareholders who aren't completely demoralized and useless, might note what Bloomberg News was told by a market analyst in Geneva in regard to the huge fines announced today against the investment banks that were caught manipulating the LIBOR interest rate.

"'Many will see this as drawing a line under this sad episode,' said Tim Dawson, an analyst at Helvea SA in Geneva who covers financial firms. 'We are less optimistic,' he said. The banks are 'likely to face a heavy burden of potential litigation in coming years.'"

Since Switzerland's market regulatory agency announced today that it had caught Swiss banking giant UBS trying to manipulate the daily London gold fix -- and since Barclays Bank already has admitted and been fined for an incident of gold market rigging -- why shouldn't such litigation now become an avalanche against the bullion banks involved in the London fix and against the investment banks that have gotten anywhere near it?

A class-action lawsuit is already under way against the London gold fix banks and its plaintiffs are looking for people to join their complaint. All people have to do is send an exploratory e-mail.

Good weapons are at hand. Do you want to die on your feet or on your knees -- or would you even prefer to win?

This brief commentary by Chris Powell, which includes a few excellent links, showed up on the gata.org Internet site yesterday afternoon.

¤ The Funnies

¤ The Wrap

I’ve been writing for quite some time that I sensed the presence of a big buyer in Silver Eagles and that the strong sales over the past few months and past few years have come when retail demand has been lacking. By process of elimination, the strong demand, if it wasn’t coming from the retail public, had to come from a more concentrated source. Further, I speculated that JPMorgan was the Mr. Big behind the extraordinary buying of Silver Eagles. I even alleged that JPMorgan, since it knew silver prices were about to collapse in mid-summer (because it would cause prices to collapse), suddenly stopped buying Silver Eagles for three months, which created an inventory of unsold coins at the Mint.

In the October 4 Weekly Review, I laid out the case for why I thought there was a Mr. Big buying Silver Eagles and why I speculated it was JPMorgan. In the next weekly review (Oct 11) I had calculated that there may have been 4 to 5 million Silver Eagles in the U.S. Mint’s inventories and that JPM had purchased 3 million (after it resumed purchases), leaving only 1 to 2 million coins in inventory. The Mint’s announcement dovetails perfectly on an amount and timeline measure to my comments. The Mint’s announcement proves there was a fairly sizable inventory which didn’t exist prior to JPMorgan’s stepping away in summer; and when the sales resumed they resumed stronger than ever and again with no obvious retail demand. I wrote that JPM played the Mint (and U.S. taxpayers) like a fiddle in letting the Mint build up inventory that Mr. Big would soon take off THE Mint’s  hands, but only at much lower (and manipulated) prices. Hey, we’re talking about JPMorgan and that’s the way these boyz roll. - Silver analyst Ted Butler: 08 November 2014

I wouldn't read too much into Wednesday's price action in either gold or silver, as there wasn't much net volume associated with it.   But, having said that, there was some shape to the gold price action during the Comex trading session---and silver certainly wasn't allowed to get far above its Tuesday closing price.

Here are the 6-month charts for gold and silver, plus West Texas Intermediate crude oil.  Nothing has changed, as the four PMs are still hugely oversold across the board, along with crude oil, copper---and and a raft of other commodities as well.

All we can do is sit here and wait for this situation to hatch into something, which it inevitably will.  And as I continually point out, only the timing is unknown.

And as I write this paragraph, London has been open for half an hour already, as I'm way behind today.  Gold, silver and platinum all rallied until 1 p.m. Hong Kong time---and then got sold down to their current low ticks at the London/Zurich opens, depending on which precious metals you're referring to.  Palladium, which has been trading more or less independently of the other three metals, was flat up to that point.

Net gold volume is already monstrous at 59,000 contracts, with very few roll overs---and silver's net volume is a hair under 5,900 contracts, with virtually no roll over volume at all, so it looks like most trading up to this point has been of the HFT variety.  The dollar index is down 13 basis points.

Tomorrow we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and as I mentioned before, I wouldn't hazard a guess as to what it might show considering the price volatility during the reporting week.

And as I send today missive out the door at 5:10 a.m. EST, I see that gold, silver and platinum rallied in the first hour of their respective trading days in London and Zurich, but all three got sold down minutes after 9 a.m. GMT London time.  Both gold and silver are down a bit on the day so far---and both platinum and palladium are up a couple of bucks.  If there are price trends developing, it's too soon to tell from the current price data.

Net gold volume is now 70,000 contracts, which is a huge number considering the price activity---and still the roll-over volume is a tiny percentage of the gross volume.  Silver's net volume is around 7,300 contracts with only a few hundred contracts worth of roll-overs out of the December contract.  I'm not sure what to make of all this volume, except it appears to be of the HFT variety, so it's obvious that there's some price management going on in these metals currently.  The dollar index hasn't changed much---and is down 12 basis points as of this writing.

That's all I have for today---and I'll see you here tomorrow.  I hope all of my readers that live west of the International Date Line have a good weekend, as it's already Friday morning there.

Ed Steer

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Thu, 13 Nov 2014 06:10:00 +0000