Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price traded basically flat until 2 p.m. Hong Kong time on their Friday afternoon.  The smallish rally that began at the point got capped sometime after 8:30 a.m. in London trading.   From there it chopped quietly lower into the jobs report.  The price went vertical at that point---and got hammered to its low of the day within ten minutes. [But if you check the New York Spot gold chart carefully, the rally actually began about a minute before the jobs numbers hit the tape.]  The tiny rally that started at that point met the same fate about five minutes before the open of the equity markets in New York---and then gold was sold down into the London p.m. gold fix.  The rally from 11:00 a.m. EDT got capped just after 12 o'clock in New York---and the price didn't do much after that.

The price traded in a ten dollar range all through Friday, so the highs and lows aren't worth the effort of looking up. 

Gold closed in New York yesterday at $1,187.50 spot, up $3.30 from Thursday.  Net volume was 110,000 contracts, which is amazing considering the tiny price range that gold traded in on Friday.

Here's the 5-minute tick gold chart courtesy of Brad Robertson---and as you can tell, the volume needed to kill that spike at 8:30 a.m. EDT was pretty chunky, something north of 20,000 contracts.  About fifteen minutes after the London p.m. gold fix was done, the volume fell off to next to nothing.  Midnight EDT is the vertical dark gray line---and don't forget to add two hours, as the chart is Denver time.  Please use the 'click to enlarge' feature.

The silver chart was, almost tick for tick, a virtual carbon copy of the gold chart, so I shall spare you the play-by-play.

Silver was also forced to trade in a tight range as well, as the low and high ticks were recorded by the CME Group as $16.26 and $16.555 in the July contract.

Silver finished the Friday session at $16.395 spot, up a thin dime.  Considering the price range, net volume was pretty chunky at 31,000 contracts, as JPMorgan et al kept silver in a vice grip as well.

Ditto, for the most part, for platinum---and it finished at $1,139 spot, up 9 dollars from Thursday's close.

It was virtually the same for palladium, except its jobs number rally was allowed to run---and except for a brief sell-off between 9 and 10 a.m. EDT, the price continue to rise, only getting capped once it broke the $800 spot mark, which also happened to be its 200-day moving average.  After that it was sold down a few dollars into the close of electronic trading.  The metal closed at $798 spot, up 20 bucks on the day.

The dollar index closed late on Thursday afternoon at 94.62---and rallied up to 94.85 shortly before noon in Hong.  From there it traded in a very broad range for the rest of the day---and it closed at 94.77---up 15 basis points.

The gold stocks opened just above unchanged and plunged briefly into negative territory at the fix.  They rallied until just after 12 o'clock noon EDT---and traded sideways for a while before rolling over in mid-afternoon trading in New York.  But in the last forty minutes, buyers reappeared and the HUI closed up 1.13 percent.

The silver equities followed a somewhat similar path, but came close to closing in the red until the late-day rally began just before the close.  Nick Laird's Intraday Silver Sentiment Index finished up 0.68 percent.

The CME Daily Delivery Report showed that zero gold and 8 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  JPMorgan stopped 6 of them: 3 for clients---and 3 contracts for itself.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Daily Delivery Report for the Friday trading session showed that another 37 gold contracts disappeared from May open interest, and the total left is now down to 156 contracts.  In silver, the May o.i. fell by 71 contracts down to 675 remaining---minus the 8 above.

There was a huge withdrawal from GLD yesterday, as an authorized participant withdrew 345,317 troy ounces.   That's north of 10 metric tonnes.  There has been no price activity during the last week or so that would justify a withdrawal of that size.  One is left wondering why it was taken out.  And as of 10:22 p.m. EDT yesterday evening, there were no reported changes in SLV.

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

Over at the COMEX-approved depositories on Thursday, it was another busy day for gold.  only 1,607 troy ounces were received, but 137,458 troy ounces were shipped out.  Almost all of the 'out' activity was from Brink's, Inc.  The link to that action is here.

It was another big day in silver as well.  1,018,832 troy ounces were reported received---and 392,119 troy ounces were shipped out.  The link to that action is here.

There was activity at both of the COMEX-approved gold kilobar warehouses in Hong Kong on Thursday.  At Brink's, Inc. exactly 1,000 kilobars were reported received---and 6,099 kilobars were shipped out.  Over at the Malca-AmitFar East Ltd depository they received a very tiny 26 kilobars.

There's been a lot of physical gold and silver movement this week.

Nick Laird was a busy boy at his home near Cairns, Australia on their Saturday afternoon---as he has three charts for us.

The first are the official India gold imports for February.  They bought only 50.2 tonnes.  The media in that country has already stated on numerous occasions that March and April gold imports are north of 100 tonnes per month, so we'll see it that's what the official numbers show.  But as you can tell, the official numbers sure take the slow boat before they get released in the public domain.

Nick's next chart shows gold imports to China via Hong Kong for the month of March.  During that month there was 66.363 tonnes imported.  Although Hong Kong may have diminished in importance as far a gateway for gold into China, it's obviously from the chart below that it remains an important one nonetheless.

Over at the Shanghai Gold Exchange for the week ending on May 1, they reported withdrawing 38.353 metric tonnes---and here's Nick's most excellent chart.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday showed an increase in the Commercial net short position in silver---and a monster drop in gold's Commercial net short position.

In silver, the Commercial net short position actually increased by 3,251 contract, which was a bit of surprise---and it now stands at 186.2 million troy ounces, or .  The 'Big 4' short holders covered 600 of their short contracts---and the '5 through 8' traders covered another 1,000 short contracts as well.  Ted's raptors, the Commercial traders other than the 'Big 8', sold about 4,900 of their long contracts.

With the new Bank Participation Report in hand, Ted Butler pegs JPMorgan's silver short-side corner in the COMEX futures market at around 14,500 contracts.  Ted also said that JPM is no longer the big short in COMEX silver.  He's right about that, as the undisputed King Short is now Canada's Scotiabank---and they have been for a long time now.  I'd peg their short position something north of 20,000 COMEX contracts.  I'll have more on this in my comments on the Bank Participation Report further down.

Under the hood in the Disaggregated COT Report the technical traders in the Managed Money category decreased their short position by 3,806 contracts---and they also added 1,861 long positions.

This past week's COT Report for silver was just as much a surprise as the previous week's report in silver was, but in the other direction---and I'll guess that it's another case of where the past two reporting weeks for silver should be looked at from a combined perspective.  It appears that data is not being reported in a timely manner, but is being reported---eventually.  I look forward to what Ted has to say to his paying subscribers later this afternoon.

In gold, the Commercial net short position declined by a whopping 32,710 contracts, or 3.27 million troy ounces.  The Commercial net short position now stands at 7.42 million troy ounces.  that's not the lowest number we've seen in a while, but it's close.

The Big 4 traders covered 6,500 of their short contracts---and the '5 through 8' covered an additional 5,500 contracts.  The raptors added almost 21,000 contracts to their already impressive long position.

Under the hood in the Disaggregated COT Report, the Managed Money sold 15,995 long contracts---and added 11,731 contracts to their already impressive short position.

Overall there was a bit of deterioration in the COT's internal structure during the reporting week, but nothing that really mattered.  Rock bottom in gold is about thirty bucks lower at most from this point---and maybe 50 cents in silver.  But as I've said before, it's not the price that matters, but the number of contracts that JPMorgan et al can trick the technical funds in the Managed Money category from either selling [long positions] or buying [short positions].  JPM just stands back, lets their HFT boyz and their algorithms do the dirty---and scoop up whatever falls off the table.

Of course this close to the price bottom, there ain't much to scoop, but they may give it the old college try before we move higher.  So we wait some more.

Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" for each physical commodity traded on that exchange.  Nothing material has changed in this chart for the 15 years I've been tracking it, as the egregious short positions in all four precious metals stand out like the proverbial sore thumbs that they are.  Especially silver, as it has barely moved from the spot you see it in now.

And as I mention in my comments about silver in the Bank Participation Report below, it's my opinion that  between JPMorgan and Canada's Scotiabank, they are short about 75 days of world silver production between them,  That's about 80 percent of the short position held by the 4 largest traders---and just under 50 percent of the 8 largest traders.  How's that for a concentrated short position?  And not a word about this 1,000 pound gorilla from CPM Group, GFMS, The Silver Institute, or the miners.

Along with yesterday's Commitment of Traders Report came the companion Bank Participation Report [BPR] for May, for positions held in April.  And as I've said in the past---"This is data extracted directly from the above COT Report, which shows the COMEX futures contracts, both long and short, that are held by the U.S. and non-U.S. banks as of Tuesday's cut-off."

In gold, 4 U.S. banks were net short 22,885 COMEX gold contracts, an improvement of about 7,000 contracts from the April BPR. I would speculate that almost all of the 6,966 contracts held long by these four U.S. banks are held by JPMorgan.  Two of the other three U.S. banks are Citigroup and HSBC USA for sure.  But now even Goldman Sachs may be involved as well, as this is the first time in a year that there have been more than 3 U.S. banks involved in the COMEX futures market in gold.  GS is now involved the London gold fix, so it makes a certain amount sense that the fourth bank would be them.

Also in gold, 20 non-U.S. banks are net short 33,934 COMEX contracts---and that's about a 12,000 contract improvement from April's BPR.  It's my opinion that Canada's Scotiabank holds about half of this short position all by itself, so the remaining 17,000-odd contracts spread out over the other '19 or more' non-U.S. banks are pretty much immaterial---unless they're all trading as a group, but I don't think that's the case at all.

Here's Nick's chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank's COMEX gold positions [both long and short] were outed in October of 2012.  Also note the vanishingly small short and long positions held by the four U.S. banks as of this month's BPR.  You have to go back to before Bear Stearns on this chart [August 2008] to see a better set up than that.  And the situation has improved a bit more since Tuesday's cut-off.

In silver, '3 or less' U.S. banks are net short 13,812 COMEX silver contracts, which is a 1,200 contract improvement since the April BPR.  Since Ted puts JPMorgan's short position at 14,500 contracts, that make it a given that the two remaining [or maybe only 1] U.S. banks are net long the COMEX silver market by a bit.  If two banks are involved, they would be HSBC USA and Citigroup.

Also in silver, '13 or more' non-U.S. banks are net short 19,921 COMEX silver contracts---and that's an improvement of about 6,500 contracts from April.  Since October of 2012 when Scotiabank got outed, it's my firm belief that at least all if not more of the above net short position is held by Canada's Scotiabank---and the chart below confirms that.  This means that the short positions of the remaining '12 or more' non-U.S. banks are immaterial in the grand scheme of things.

Here's the BPR chart for silver.  Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold.  Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns---the red bars.  It's very noticeable in Chart #4---and really stands out like the proverbial sore thumb in chart #5.

I estimate that between JPMorgan and Scotiabank, they are currently net short about 35,000 COMEX silver contracts between them.

In platinum, '3 or less' U.S. banks are net short 7,199 COMEX contracts which is up about 500 contracts from the April BPR.  I'd guess that JPM is short over half this amount by itself---and maybe only HSBC USA is short the rest.  Citi would be a small player, if they are at all.

Also in platinum, '13 or more' non-U.S. banks are net short 9,678 COMEX contracts, which is also an increase from the April BPR.  If there is a large player in platinum amongst the non-U.S. banks, I wouldn't know which one it is, but 13 divided into 9,678 contracts isn't a lot anyway, unless they're all operating in collusion---which I doubt it.  Platinum price management is an American show as well.

Here's the BPR chart for platinum---and please note that the banks were never a factor in platinum until mid 2009.  Now look at them.  If you want to know why the platinum price isn't going anywhere, despite the supply/demand fundamentals, look at the total long positions the banks have vs. their collective short positions.  Palladium too!  That tells you all you need to know.  The banks are net short about 24 percent of the entire COMEX futures market in platinum.

In palladium, '3 or less' U.S. banks are net short 7,875 COMEX contracts, which is an improvement of about 500 contracts from the April BPR.

Also in palladium, '13 or more' non-U.S. banks are net short 3,169 COMEX contracts which is a deterioration of about 800 or so contracts from the April BPR.

Here's the BPR chart for palladium updated with the May BPR data.  Just look at the long positions vs. the short positions held by the U.S. banks in Chart #5.  You couldn't make this stuff up!  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007---and they became the predominant and controlling factor by the end of Q1 of 2013, where they remain today.  I would bet that JPMorgan holds the vast majority of the U.S. banks' short position---and maybe all of it.  Platinum as well.  And how about silver?  And just as matter of interest, the banks, in total, are net short about 34 percent of the entire COMEX futures market in palladium, but it's the '3 or less' U.S. banks that are calling the shots in this metal---and in the other three precious metals as well.

As I said last month at this time---along with the odd Wall Street investment house, these are "da boyz'---the sellers of last resort---and you can call them what you like.  Until they decide, or are instructed to stand back, the prices of all four precious metals are going nowhere---supply and demand fundamentals be damned!

As Jim Rickards so correctly put it, the price management scheme is now so obvious, they should be embarrassed about it.

But they obviously aren't.

I have a lot of stories today, along with quite a few I've been saving for length or content reasons---and I hope you can find time in what's left of your weekend to read the ones that interest you the most.  But as is always the case, the final edit is up to you.


¤ Critical Reads

Jim Rickards: Talks about the faltering U.S. economy

This video clip with Jim was on the BoomBust program on the Russia Today website on Thursday---and it's definitely worth watching.  The pertinent part of this video clip starts at the 2:45 minute mark---and runs for a bit under six minutes.  I thank Harold Jacobsen for sending it to me in the wee hours of Friday morning---but I'd already filed yesterday's column by then.


Job report gives Fed green light to move in September

The rebound in the April job report gives the Federal Reserve the green light to raise interest rates in September, economists said.

The Labor Department reported that the labor market churned out a healthy 223,000 new jobs in April, and the unemployment rate fell to 5.4%, the lowest level since mid-2008.

“I think the April report comes too late to put June on the table but there is going to be a focus on September,” said Carl Tannenbaum, chief economist at Northern Trust, in an interview.

The data gives support to the consensus view at the Fed that the first-quarter growth was an aberration, he said. Two Fed officials, Atlanta Fed President Dennis Lockhart,a key moderate on the policy committee, and Chicago Fed President Charles Evans, a leading dove on the central bank, both said this week that they expected the economy to improve after the dismal first quarter.

Well, dear reader, if you believe this, I still that have that bridge for sale.  This news item was posted o the Internet site at 9:36 a.m. EDT on Friday morning---and today's first story is courtesy of reader 'David in California'.


Unemployment drops to 7-year low in April

The U.S. churned out 223,000 new jobs in April in a sign the economy is back on track after growth stalled in the first quarter and hiring briefly nosedived.

Most major segments of the economy except for the energy industry added workers, the government said Friday, suggesting the second quarter got off to a pretty good start. Stronger job gains also tugged the unemployment rate down to 5.4% from 5.5% to mark the lowest level since mid-2008.

What’s more, the number of people who entered the labor force in search of work also rose, a sign jobs are easier to find. A separate government report has found that job openings are at an all-time high.

The latest employment figures are likely to keep the Federal Reserve on course to raise interest rates in 2015 for the first time in nine years. The central bank has tied its decision to steady improvement in the labor market and a September rate hike is no[w] seen as most likely.

Yes, but what this story doesn mention at all, is the growing number of Americans that aren't looking for work, because there aren't any jobs.  This is another fairy tale from the website, this one from early yesterday afternoon EDT---and it's the second story in a row from 'David in California'.


House Flippers Are Back Together With Wall Street: What Could Possibly Go Wrong?

Real estate buyers seeking money to renovate and flip U.S. houses are getting help from some of the world’s biggest investment firms.

Colony Capital Inc., Blackstone Group LP and Cerberus Capital Management are among the companies that have started making bridge loans to investors who buy homes to sell them quickly for a profit. Borrowing costs -- traditionally the highest in residential lending -- are tumbling as the firms compete for customers.

The foray represents a deepening bet on the housing market by Wall Street-backed companies, many of which have built rental-home empires during the past three years and started specialty-lending businesses to finance smaller investors. Big firms with deep pockets and access to cheap capital may have an edge over local private lenders that have dominated flipper financing.

“It’s one of the few highly fragmented businesses left,” said Beth O’Brien, chief executive officer of Colony’s lending business, which started offering the loans last May. “If someone can do it nationally at scale, it’s cheaper and better for the borrower.”

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


The disconnect in the U.S. stock market just keeps getting bigger

The big disconnect in the US stock market just keeps getting bigger.

A new Bank of America Merrill Lynch survey published Thursday finds that US investors have pulled $99 billion out of equities year-to-date — including net outflows in 11 of the past 12 weeks — despite stock prices continuing to break record highs.

This week also saw the biggest outflows from equity ($17.2 billion) and high-yield bond funds ($2.6 billion) this year. This data follows a similar report from BAML last month that showed investors pulled $79 billion from the stock market this year and nine of 10 weeks to that point.

As this imbalance grows, Bank of America writes, so does the risk of something we haven't seen in the market in years: a correction.

That's all there is to this tiny news item that appeared on the Internet site at 10:11 a.m. EDT yesterday morning---and the embedded chart is definitely worth the trip!  It's the first offering of the day from Roy Stephens.


The 90,000 square foot, $100 million mansion that is a metaphor for America

Just like “America’s time-share king”, America just keeps on making the same mistakes over and over again. Prior to the financial collapse of 2008, time-share mogul David Siegel and his wife Jackie began construction on their “dream home” near Disney World in Orlando, Florida. This dream home would be approximately 90,000 square feet in size, would be worth $100 million when completed, and would be named “Versailles” after the French palace that inspired it.

In fact, you may remember David and Jackie from an excellent 2012 documentary entitled “The Queen of Versailles”. That film documented how the Siegels almost lost everything after the financial collapse of 2008 devastated the U.S. economy because they were overleveraged and drowning in debt. But since that time, David’s time-share company has bounced back, and the Siegels now plan to finally finish construction on their dream home and make it bigger and better than ever before. But before you pass judgment on the Siegels, it is important to keep in mind that we are behaving exactly the same way as a nation. Instead of addressing our fundamental problems after the last financial crisis, we have just continued to make the exact same mistakes that we made before. And ultimately, things are going to end very, very badly for us.

As Americans, we like to think that we are somehow entitled to the biggest and best of everything. We have been trained to believe that we are the wealthiest and most prosperous nation on the entire planet and that it will always be that way. This generation was handed the keys to the greatest economic machine in world history, but instead of treating it with great care, we have wrecked it. Our economic infrastructure is being systematically dismantled, Wall Street has been transformed into the biggest casino in the history of the planet, we have piled up a mountain of debt unlike anything the world has ever seen, and the reckless Federal Reserve is turning our currency into Monopoly money. All of our decisions have been designed to make things better for ourselves in the short-term without any consideration about what we were doing to the future of this country.

This very interesting story showed up originally on the blog, but was picked up by Alex Jones and his crew over at on Friday.  And if you don't want to read the article, which is certainly worth your while, you should at least glance at the photo.  I thank Brad Robertson for finding it for us.


Doug Noland: The End is Near

Importantly, systemic risk rises exponentially during the “Terminal Phase.” The clearest example was the explosion of mispriced mortgage Credit during 2006/07 – surging quantities of high-risk loans/securities that depended on ever increasing quantities of high-risk lending, higher home prices and a thriving securities marketplace.

Today’s (not as discernible) “Terminal Phase” is dependent upon an unending stream of willing buyers of inflated securities in the face of mounting market and economic risks. It depends on corporate America’s insatiable appetite for its own stock. It depends on the leveraged speculating community staying in the game and bullish. It absolutely relies on the system continuing to expand Credit – at home and abroad. And all of this is dependent upon “activist” policy measures that have pretty much run their course (over almost 30 years).

As an analyst of Bubbles, there’s always a fundamental question: Where is the source of the Credit fueling the boom and how stable is it? If the boom is fueled by market-based finance, then there is an inherent stability issue. Years of policy measures to intervene and manipulate markets essentially foster a massive financial scheme – a confidence game. The question then becomes the relative stability or fragility of this scheme. At this point, what are the prospects for an expansion of Credit sufficient to sustain a historic Bubble in market-based finance?

And this gets right to the heart of the matter: Asset-based Credit rests on the ongoing inflation in asset prices. It is, after all, a real challenge to leverage an asset declining in value. As was experienced in 2009, faltering asset markets incite a self-reinforcing contraction of Credit and asset values. More generally, a system comprised largely of market-based finance rests upon ever-rising security market prices.

Doug's weekly Credit Bubble Bulletin is always on my must read list---and Friday evening's offering should certainly be on yours as well.  I thank reader U.D. for sending it around last night, as I had no time to go looking for it myself.


General Election 2015: Pound surges against the euro after Conservatives storm ahead

The pound made its biggest one-day gain against the euro for two years and the FTSE-100 was expected to surge as the Conservatives stormed ahead in the polls on Friday.

Markets rejoiced at the prospect of a stable, Tory-led government continuing the austerity economics of the past five years.

Sterling leaped at 10 p.m. following the exit polls and continued rising As results came in. Against  the dollar it is now up 2 cents at $1.5498, traders said. The euro slumped against the booming pound by 1.54p to 72.46p.

Broadly, sterling moved in line with the results coming in and their effect on the spread betting markets predicting the outcome for the Tories. It peaked as, at one stage, these were indicating a spread of between 322-325 seats for the Tories. The spread is currently 319-322.

This short article appeared on the Internet site early Friday morning BST---and it's the second story of the day from Roy Stephens.


Cameron's appeal to quiet conservatism has triumphed

By any historical measure this was a stunning election victory for the Conservatives, greater even than 1992 when they last won a majority in the Commons. Unlike then, the Tories had Ukip to contend with, threatening to scupper their chances of winning. This time, the electoral system was even more heavily weighted against them because the Lib Dems stopped the last parliament redrawing the constituency boundaries. Had these more accurately reflected the strength of Tory support in England, David Cameron would probably have won another 20 seats.

The Prime Minister was right to describe this as the party’s “sweetest victory” for a generation when he visited staff at Conservative HQ to thank them for their sterling efforts. Mr Cameron was honest enough to concede that he never quite believed the Tories would get to where they have ended up, with an overall majority of 12 seats. They are the first governing party to increase their share of the vote since 1966 and the first since 1983 to increase their representation in Parliament, gaining 30 seats – mostly from the Liberal Democrats. For Mr Cameron this was a great personal triumph and one that he is entitled to savour this weekend, not least because the next five years are likely to prove far more onerous than the last.

When he met the Queen shortly after noon yesterday – an audience that was not strictly necessary, since he continues as her Prime Minister – his most powerful emotion must have been a sense of vindication. During the campaign he slipped up by calling the election a “career-defining moment”, when he mean to say “country defining”. But he was right on both counts.

The Tory campaign had been criticised, occasionally by this newspaper, for lacking fire and ambition; yet Mr Cameron and his team stuck to a core set of messages emphasising leadership and economic competence, the twin virtues that once again have proved critical in an election. The pollsters were confounded, just as they were in 1992 and for the same reason: they underestimated the hidden Conservative vote. The polling companies claim to have made sweeping changes to their methodology after their disastrous performance 23 years ago; yet they got this spectacularly wrong and an independent inquiry has already been announced by the British Polling Council into their failings.

This interesting commentary on the U.K.'s election appeared on the Internet site at 7:02 p.m. BST on their Friday evening, which was 2:02 p.m. in Washington.


May 7th, 2015 - the day the United Kingdom died?

Nobody doubts the U.K. General Election delivered an extraordinary outcome. However, in the long term, May 7th 2015 could eventually be remembered as the day the U.K. croaked it.

The pundits and pontificators spun Election 2015 as a close run vote, certain to deliver a hung parliament. They were misguided. Instead, David Cameron reigns supreme with an overall majority for his Conservative Party and Ed Miliband, Nick Clegg and Nigel Farage have all resigned. While the latter will probably reappear without much delay, the first two are now consigned to the wastebasket of history.

In a single day, Miliband has gone from being the favorite to enter 10 Downing Street to the back-benches. Meanwhile, David Cameron has spent the afternoon kicking back with the Queen. It all sounds like nothing has changed. This is wrong. Everything has changed.

This longish, but very interesting commentary was posted on the Russia Today website at 3:29 p.m. Moscow time, which was 8:29 a.m. in New York.  It's another contribution from Roy Stephens.


Skeletons of the Past: Helping Europe's War Dead Find a Final Resting Place

Thomas Schock is standing on a plot of land in Redczyce near Znin in western Poland. The region was known during World War II as the Reichsgau Wartheland, formed from Polish territory annexed by the Nazis in 1939. Redczyce then became Rettschütz and Znin became Dietfurt. It's a blustery day in March, 70 years after the war ended. The birch and pear trees are bare. "Ideally, the troops who died would have been advancing," says Thomas Schock. That would mean there might be grave plans, sketches and photos. "It's harder if the troops were retreating." A bulldozer behind him has already cleared away a meter of ochre soil. "Stop!" yells Schock. He's noticed a dark patch in the sand. "Shadows of corpses," he says.

Thomas Schock is a qualified forest ranger who studied the subject in the northern German state of Schleswig-Holstein. But he got bored with the forest and retrained. Now he specializes in exhuming dead bodies and remnant bones and re-burying them in another location. He recalls how he used to spend his evenings filling out reburial forms, processing reports on deceased people from a 17-year-old buried in a shallow grave to victims of violence and mass graves for soldiers and civilians, layers upon layers of bones, skulls and boots. "Nothing but death and suffering," says Schock. "I knew I either had to give up or just get on with it." Today he works for the German War Graves Commission, where he is in charge of exhumation and reburial in central and southeastern Europe.

Behind him, the bulldozer's driver has switched off the engine. The team continues digging up the field in Redczyce with trowels, unearthing stratum upon stratum of soil. The same way that images slowly emerge when a photographer processes pictures in a dark room, a semblance of a soldier gradually appears, in the form of a helmet, a skull, remains of boots and a padded coat, ribs.

My grandfather fought in The War to end all Wars in both Belgium and France.  He got wounded charging a German machine gun emplacement---and got sent home.  That's why I'm here today.  This amazing, but depressing story, which was originally headlined "Bones of World War Soldiers Still Being Excavated Across Europe", appeared on the German website on Thursday morning Europe time---and Roy sent it our way yesterday.


Once Known as Preeminent Soviet Scholar, Stephen Cohen Now Seen as Putin Apologist

On a recent Friday evening, the prominent Russia historian Stephen Cohen took the mic before an audience of 3,000 in Toronto to debate Western policy toward Russia in light of the Ukraine conflict.

Over the next 90 minutes, the man renowned for his pioneering scholarship on the Soviet Union accused the West of provoking Russian President Vladimir Putin with NATO expansion, stoking potential war with Moscow, and failing to acknowledge its responsibility for what has happened in Ukraine in the last 15 months.

For those who have followed Cohen’s commentary, it was hardly surprising that many of his arguments dovetailed with a narrative pushed by the Kremlin, which portrays its seizure of Crimea as a response to Western meddling in Ukraine.

But toward the end of his debate with two strident Putin critics -- former world chess champion Garry Kasparov and journalist Anne Applebaum -- Cohen delivered a preemptive aside tailored for those who dismiss him as a dupe for the Russian leader.

This hatchet job appeared on Radio Free Europe on Wednesday---and is certainly worth reading if you have the interest.  My thanks go out to Roy Stephens once again---and it's a story that had to wait for Saturday's column.


John Batchelor interviews Stephen F. Cohen

Once again John Batchelor and Stephen F. Cohen step back from the details of the Ukraine Crisis and discuss why this civil war is seen as an existential threat to Russia. This involves a delving into a horrendous history suffered by Russians during WW2 from the German invasion, made much more poignant when Cohen compares the costs of this war to Russia as compared to Great Britain and the United States.

The Russians lost 27 million people in the conflict, some 14% of their whole population - whereas Great Britain lost 0.6% and the USA about 1/2 that - and huge infrastructure losses, to Russian towns and cities as well. Cohen continues to put this into perspective in that high school boys at 18 years were conscripted for combat, and out of 100 of these people sent to the fronts, only 3 came back....This is just some of the background Cohen gives - and again to add perspective, compares the USA version of V.E. day - which is no longer celebrated - to the coming May 9th Russian V.E. event which is seen as THE most important event of all for Russians. That the E.U. and Washington is seen by Russians as attempting to vandalize and boycott their most sacred national event is a "grave insult, and will not be forgiven or forgotten for a very long time". Cohen equates this behavior from the U.S. (and other leaders) as a "failure of leadership" on a large scale.

But the Russian experience in WW2, Cohen states, is important as it pertains to Ukraine Crisis as well. Russians look upon the extremist government, with its Nazi traits, as a kind of continued "occupation" from the Second World War; the horrendous damage that Russia suffered then has given the Russian citizen a very strong appreciation for seeing to their national security - and the predatory behavior of NATO encroaching on its borders to the west and south is seen (correctly) as an existential threat. Cohen pointed out that the average Russian, although not happy with the tyranny of the Soviet system, was fully in agreement with the state in regards to national security. We might contrast that statement with the 86% approval rating enjoyed by Putin from his citizens today.

Here's another 39:50 minute audio interview with Stephen that appeared on the Internet site on Tuesday---and I thank Larry Galearis for bringing it to our attention.  It's a must listen in my opinion, but it's your call.  For content and length reasons it obviously had to wait for my Saturday missive.


27 Russian firms among world’s most powerful companies - Forbes

Forbes has named 27 Russian companies, including those hit by Western sanctions, among the world’s largest and most powerful in its Global 2000 annual list.

Energy giant Gazprom tops the list of Russia’s largest businesses, according to Forbes. The company is ranked 28th in the global rating with a market value of $62.5 billion. Also at the top of the list are two more energy companies, Rosneft (59) and Lukoil (109), and Russia’s biggest lender Sberbank (124).

Russia’s energy firms - Gazprom, Rosneft, Lukoil, Transneft and Surgutneftegaz – have largely preserved their high ranking despite being sanctioned by the E.U. in September. These restrictions included a prohibition on providing services needed for deep sea, Arctic, and shale oil projects. Major Russian state-owned banks have been banned from receiving any long-term (over 30-day) loans from E.U. companies.

This Russia Today news story talks about many other countries than Russia---and it's definitely worth reading.  It appeared on their website Thursday evening Moscow time---and I thank South African reader B.V. for sending it along.


Russia and China Conclude several Important Agreements on Friday

Russian President Vladimir Putin today, May 8th, will hold talks in Moscow with President Xi Jinping. The president's aide Yuri Ushakov told reporters that the Chinese leader is in Russia for several days on an official visit at the invitation of Putin.

The Kremlin has said the Chinese leader is in the Russian capital at the invitation of Putin. More than 40 agreements ranging from security to the economy and energy are expected to be signed by the two leaders as they are poised to boost Sino-Russian ties.

During the talks, Xi and Putin are also likely to discuss a range of international political issues alongside expanding the two countries' strategic cooperation.

Xi will be in Moscow from 8 to 10 May also to attend Russia's military parade marking the 70th anniversary of World War II.

This article put in an appearance on he Internet site on Friday---and the stories from Roy just keep on coming.


The Return of Peak Oil – Worrying Signs From U.S. and Russia

Since around 2005 many countries have increased their oil production but more have decreased. But the combined production of the United States and Russia have kept the world on a slight uptrend since that time.

World oil production jumped in 2011, hardly moved at all in 2013 but it was up by more than 1.5 million barrels per day in 2014.  And after such a huge gain everyone and their brother were singing “peak oil is dead’. But if you scroll down through the 37 major world oil producers it becomes obvious that a majority of nations have peaked and most of them are in steep decline.

The above chart is EIA data; however, the next four charts below are JODI data with the last data point February 2015. The data on all charts is thousand barrels per day.

In the last decade it has been two of the world’s three largest oil producers that have kept us from peak oil, the USA and Russia.

This very interesting, but longish chart-filled essay was something that Roy Stephens found on the David Stockman website, but I thought I'd post it from the website where David got it from---and that was on the Internet site.  It's dated Tuesday, May 5.


Gazprom, Ankara agree to start Turkish Stream gas deliveries in Dec 2016

The Turkish Stream pipeline will become operational in December 2016, said head of Gazprom Aleksey Miller.

"An agreement [between Russia and Turkey] has been reached on operational commissioning and the start of gas deliveries via Turkish Stream in December 2016,” said Miller, according to a statement released by Gazprom.

The agreement was signed by Miller and Turkish Minister of Energy and Natural Resources Taner Yildiz during a meeting on Thursday.

Gazprom will regard today’s agreements as a basis for the schedule of its work on the Turkish Stream project,” the head of Gazprom said.

This is another offering from the Russia Today website.  This one showed up there around noon Moscow time on Thursday---5 a.m. in New York---and my thanks go out to Roy Stephens once again.


Isis on the run? The U.S. portrayal is very far from the truth

A graphic illustration of Western wishful thinking about the decline of Islamic State (IS) is a well-publicised map issued by the Pentagon to prove that the self-declared caliphate has lost 25 per cent of its territory since its big advances last year.

Unfortunately for the Pentagon, sharp-eyed American journalists soon noticed something strange about its map identifying areas of IS strength. While it shows towns and villages where IS fighters have lost control around Baghdad, it simply omits western Syria where they have been advancing in and around Damascus.

The Pentagon displayed some embarrassment about its dodgy map, but it largely succeeded in its purpose of convincing people that IS is in retreat. Many news outlets across the world republished the map as evidence of the success of air strikes by the United States and its allies in support of the Iraqi army and Kurdish forces in Iraq and Syria. The capture of Tikrit after a month-long siege is cited as a further sign that a re-energised Iraqi state is winning and one day in the not too distant future will be able to recapture Mosul in the north and Anbar province in the west.

How much of this comforting news is true?

This commentary by Patrick Cockburn was posted on the Internet site last Sunday---and is certainly worth reading if the subject interests you.  I thank reader B.V. for sharing it with us---and for obvious reasons it was a prime candidate for today's column.


CFR Says China Must Be Defeated -- and TPP Is Essential to That

Wall Street’s Council on Foreign Relations has issued a major report, alleging that China must be defeated because it threatens to become a bigger power in the world than the U.S.

This report, which is titled “Revising U.S. Grand Strategy Toward China,” is introduced by Richard Haass, the CFR’s President, who affirms the report’s view that, “no relationship will matter more when it comes to defining the twenty-first century than the one between the United States and China.” He says that the report he is publishing argues that “strategic rivalry is highly likely if not inevitable between the existing major power of the day and the principal rising power.” Haass says that the authors “also argue that China has not evolved into the ‘responsible stakeholder’ that many in the United States hoped it would.” In other words: “cooperation” with China will probably need to become replaced by, as the report’s authors put it, “intense U.S.-China strategic competition.” 

Haass gives this report his personal imprimatur by saying that it “deserves to become an important part of the debate about U.S. foreign policy and the pivotal U.S.-China relationship.” He acknowledges that some people won’t agree with the views it expresses.

The report itself then opens by saying: “Since its founding, the United States has consistently pursued a grand strategy focused on acquiring and maintaining preeminent power over various rivals, first on the North American continent, then in the Western hemisphere, and finally globally.” It praises “the American victory in the Cold War.” It then lavishes praise on America’s imperialistic dominance: “The Department of Defense during the George H.W. Bush administration presciently contended that its ‘strategy must now refocus on precluding the emergence of any potential future global competitor’—thereby consciously pursuing the strategy of primacy that the United States successfully employed to outlast the Soviet Union.”

American power being ruthless projected for all to see once again.  I have only one absolute must read in today's column---and this is it.  My thanks goes out to reader Norman Willis for sending it our way on Wednesday.


Australia PM advisor says climate change a U.N.-led ruse

Australian Prime Minister Tony Abbott's top business advisor on Friday claimed climate change was a ruse encouraged by the United Nations to create a new authoritarian world order under its control.

Maurice Newman, chairman of the Prime Minister's Business Advisory Council, said the real agenda was "concentrated political authority. Global warming is the hook".

In a column for The Australian newspaper to coincide with a visit by U.N. climate chief Christiana Figueres, he added that the world had been "subjected to extravagance from climate catastrophists for close to 50 years".

"It's a well-kept secret, but 95 percent of the climate models we are told prove the link between human CO2 emissions and catastrophic global warming have been found, after nearly two decades of temperature stasis, to be in error," he said, without providing evidence.

Well, dear reader, if you're looking for the unvarnished brass knuckles truth behind all this climate change stuff that's been going on---here it is.  This a must read from one end to the other.  Our man in Greece, Harry Grant, was the first person through the door with it yesterday.  It's an AFP story that was picked up by the Internet site early Friday morning EDT.


Jim Rickards and The National Center for Policy Analysis

I posted a Reader's Digest transcript version of Jim's talk at this event in one of my columns from earlier this week.  But here's the video clip of this event.

It was posted there on Thursday sometime---and for length reasons had to wait for today's column---and it's the second offering of the day from Harold Jacobsen.  It runs for 66 minutes, so blow the froth off a cold before you hit the play button.  I stuck it in this part of the column, because it really didn't fit anywhere else.


World food prices at 5-yr low, unlikely to rise – U.N.

Global food prices continued to decline and fell to their lowest since 2010 on lower agricultural commodities prices the UN Food and Agriculture Organization (FAO) said. More supplies and a strong US dollar have kept prices under downward pressure.

Food prices averaged 171 points in April, down 1.2 percent from March and 19.2 percent below their level in April 2014, according to the FAO price index in the biannual Food Outlook issued on Thursday.

Dairy prices fell the most, charting a 6.7 percent drop from March, sugar, cereals and vegetable oil prices also declined. Meat price was the only gainer in April, rising 1.7 percent from its revised March value. Higher import demand in China, Japan, the United States and Vietnam was the main factor underpinning the overall meat market.

The FAO predicts global cereal production will reach 2,509 billion tons for 2015, 1.5 percent down from last year's record but nearly 5 percent above the average of the past five years. Overabundance of wheat is likely to continue into the 2015-2016 season in spite of the forecast decline in 2015 production. World wheat inventories are at sufficiently large levels, following two consecutive years of record crop.

This short, but rather interesting article appeared on the Russia Today website early on Thursday afternoon Moscow time---and I thank reader B.V. for sharing it with us.  It's worth skimming.


Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his thoughts on recent U.S. job numbers, his outlook on the Greek debt crisis, increased volatility in the foreign currency market this week, and India’s proposed gold monetization scheme.

This 10:31 minute audio interview with Eric by host Geoff Rutherford was posted on the Internet site yesterday afternoon.


Mark O'Byrne: The Economist's anti-gold article, a case study in disinformation

Friday's commentary by GoldCore's Mark O'Bryne is a rebuttal to last week's disinformative sneer at gold by The Economist---and in far more detailed than the rebuttal provided Thursday by GATA secretary Chris Powell.

Mark rips The Economist a new one, but is way too nice about it.  He's a lot like Lawrie Williams in that respect, which seems to be a disease they catch when they've been sniffing the fumes from the Gulf Stream for too many years.  It's worth reading.  I found the story by myself, but the headline and first introductory paragraph is courtesy of Chris Powell.


Neoconning the public: Another sad tale from the Barrick Gold archives

Nigel Wright has been much in the news [here in Canada - Ed] for the $90,172 cheque he signed over to Senator Mike Duffy. Much less attention has been devoted to the scandalous implications of the $9 million payment from former Foreign Affairs Minister John Baird to Peter Munk’s School at the University of Toronto. The anatomy of both deals sheds light on the abundant conflicts of interest linking the Barrick Gold Company with Conservative Party governments led by Brian Mulroney and now Stephen Harper.

After terminating his tenure as the most undiplomatic Minister of Foreign Affairs in Canada’s history, John Baird has been extended a place on Barrick Gold Corporation’s International Advisory Board. Its founding Chair was former U.S. President George H.W. Bush. The international panel’s current Chair is former Canadian Prime Minister Brian Mulroney.

A close student of the relationship between Bush Sr. and Mulroney, in 1997 Anton Chaitkin came up with the phrase “Barrick’s Barracudas.” Baird is a recent recruit among this school of fishy predators inhabiting those murky zones of lucrative interaction between business and politics. This pattern goes back at least to 1984 when Adnan Khashoggi visited Ontario’s capital to establish a Toronto headquarters for the Barrick complex of companies.

Bad boy Barrick has a long and sordid history---and here's another chapter in it.  This longish essay appeared on the Canadian Internet site earlier this month---and I thank Vancouver, B.C. reader A.D. for bringing it to my attention---and now to yours.  It's worth reading if you have the time, or the interest.


Centuries-Old Shipwreck Chock-Full of Gold Found Off Finnish Coast

More than $150 million worth of gold treasure has been found in a centuries-old shipwreck discovered recently off the coast of Finland — and it has archaeologists going gaga.

 Divers found the ship and its treasure — 10,000 gold coins and jewelry — south of the Finnish island of Jussarö, Discovery News reported.

The divers think the sunken vessel, a legendary 15th-century ship named Hanneke Wrome, sank in a storm. According to historic documents, the ship had more than 200 passengers and crew members aboard. In addition to the coins and jewelry, it carried 200 parcels of fabric and 1,200 barrels of honey.

This very interesting gold-related story showed up on Internet site yesterday---and it represents the final offering of the day from Roy Stephens, for which I thank him on your behalf.


Counting gold in Switzerland

Switzerland conjures up images of watches, chocolate or banks, but not usually of gold. Yet it is the biggest gold trader in the world.

The last goldmine in Switzerland closed for good in 1961, more than 50 years ago. The seam, between Astano and Sessa in Ticino, was fully depleted. Today a few hundred amateur gold panners perpetuate the tradition, primarily in the region of Napf between the cantons of Bern and Lucerne, where it is still possible to find gold deposits.

Yet the absence of this precious metal – and more generally of all raw materials found underground – has not prevented Switzerland from becoming a real force in the business of buying and selling gold. It leads the rankings in the international gold trade with a market share of about 15%, according to 2012 figures from the BACII International Trade Database and the Observatory of Economic Complexity.

The figures provided by these two international institutes, which aim to reconcile statistical methodologies that vary from one country to another and are sometimes based on incomplete information, still do not fully reflect the importance of Switzerland in the gold trade. Figures released by the Federal Customs Administration are more revealing. In 2012, imports increased to 2,200 tonnes, with a value of CHF88 billion ($95.8 billion) and exports rose to 1,500 tonnes (CHF80 billion). In 2014, imports and exports reached a historic record, at 3,500 and 3,900 tonnes respectively – more than the total quantity of gold extracted in a year worldwide (about 2,500 tonnes). However the total values of imports and exports fell as gold depreciated.

This interesting article was posted on the website on Friday---and I thank reader B.V. for digging it up for us.


Congo copper and gold production jumps in Q1

Copper and gold production in Democratic Republic of Congo rose sharply in the first quarter of 2015, despite continuing uncertainty about a proposed revision of the mining code.

Congo, which vies with Zambia to be Africa's leading copper producer, mined 279 573 t of the metal during the quarter, according to the central bank's March statistical bulletin. That was up 13.7% from 245 868 t over the same period in 2014.

Gold production jumped to 8 457 kg in the first quarter of 2015 from 4 972 kg over the same period last year, a 70% rise.

Large new gold mines opened by companies like Randgold Resources, AngloGold Ashanti and Banro Corporation in the last four years have boosted Congo's industrial gold output from near zero in 2011 to over 20 tonnes last year. The country hopes to become one of the continent's leading gold producers.

This Reuters article appeared on the Internet site on Friday---and I thank South African reader B.V. for his final contribution to today's column.



¤ The Funnies

Uranium Energy Corp. (NYSE MKT: UEC) is pleased to announce that the final authorization has been granted for production at its Goliad ISR Project in South Texas.  As announced in previous press releases, the Company received all of the required authorizations from the Texas Commission on Environmental Quality, including an Aquifer Exemption which has now been granted concurrence from EPA Region 6.

Amir Adnani, President and CEO, stated, “We are very pleased to have received this final authorization for initiating production at Goliad. Our geological and engineering teams have worked diligently toward achieving this major milestone and are to be truly commended. We are grateful to the EPA for its thorough reviews and for issuing this final concurrence. The Company’s near-term plan is to complete construction at the first production area at Goliad and to greatly increase the throughput of uranium at our centralized Hobson processing plant.” Please contact Investor Relations with questions or to request additional information,


¤ The Wrap

After complaining to the CFTC about a COMEX silver manipulation for 30 years and having the agency forcefully deny that such a manipulation by means of a concentrated short position existed in May of both 2004 and 2008, it turned out that the largest silver (and gold) COMEX short (Bear Stearns) went, effectively, bankrupt in March 2008, months BEFORE the CFTC’s 2008 public denial that anything was wrong on the short side of COMEX silver. Please think about that for a moment. The CFTC denied both before and after that there was no manipulation in COMEX silver and no problem with the unreasonably large concentrated short position even though the largest such short, Bear Stearns, went belly up on a rise in silver prices to $21 in March 2008.  Any CFTC official who participated in that lie that should be in prison.

After the crooked bank JPMorgan took over the concentrated and manipulative COMEX silver short position at the U.S. Government’s request after I and many complained, the CFTC initiated a formal investigation by its enforcement division that stalled and wasted taxpayer money for five years without any clear findings as JPM continued to manipulate silver prices. It was only when, in April 2011 with silver prices close to $50---and with JPM looking into the financial abyss, that the big rig job to the downside took place. Only this time, JPMorgan had decided to buy as much silver as possible to score to the upside.

Comparing what took place with Bear Stearns and JPMorgan and the shocking participation by the CFTC and the CME Group in what must be called the silver crime of the century, I’m not the least bit shocked by JPMorgan’s acquisition of the largest private stockpile of silver in history. If others wish to be shocked by my conclusions, that’s their business, but how they aren’t shocked by what preceded it is, well, shocking to me. To top matters off, as subscribers are aware, I send everything I write to the crooks at JPMorgan, the CFTC and the CME never hear a peep back from these dirt bags. Yeah, I know, I’m going to get in trouble for this one day. Rant off. - Silver analyst Ted Butler: 06 May 2015

Today's pop 'blast from the pasts' are somewhat of a rare bird for me, as they're both from the 21st century.  Although I'm not really a fan of the artist or her music, these two songs of hers will certainly stand the test of time.  I'm not wild about the official video it's embedded it, either---but it is what it is---and the link is here.  Her other hit of hers that I like is here.

Today's classical 'blast from the past' is Antonín Dvořák's Serenade for wind instruments, cello and double-bass in D-minor Op. 44 which he composed in 1878.  It premiered in Prague in the same year.  It's in two parts, with part #2 in the right side bar.  I've posted this before, but it's been a couple of years, so here it is again.  The link to part #1 is here.

Although there certainly wasn't a lot of price movement allowed in either gold or silver, the volume was high enough in both to indicate that there was lots going on under the surface.  The most obvious thing was the fire power that was used by "da boyz" to keep the gold price under wraps at 8:30 a.m. EDT.

This sort of price action at the job numbers is pretty representative of what happens on this one day a month, but it was obvious that the powers-that-be were leaving nothing to chance.

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

We're virtually at the lows from a Commitment of Traders perspective---and even though there's a bit of room if JPMorgan et al want to push it, from a price perspective, the bottom is basically within spitting distance from where we sit today.

As to what comes next---and when---I haven't a clue.  But one has to sense that the current supply/demand fundamentals in both silver and gold, backed by a 'locked and loaded' COT structure, is going to result in a significant repricing of the precious metals at some point.

It will be interesting to see if this repricing rally, if and when it does materialize, will be allowed to burn itself out to the upside---or will JPMorgan et al step in at some point with another ceiling on the price, albeit at a much higher level?

If you read Doug Noland's Credit Bubble Bulletin in the Critical Reads section, his weekly commentary "The End is Near" comes as a final signpost as the edge of the economic, financial and monetary precipice looms into view.

All we can do is sit and wait with our fingers in our ears, hoping that we will survive it all.

But while I'm waiting, I think I'll have a beer.

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

See you on Tuesday.

Ed Steer