Gold & Silver Daily

¤ Yesterday In Gold & Silver

After a little bump up at the 6 p.m. open on Thursday evening in New York, the gold price chopped sideways in Far East trading on their Friday morning before developing a negative bias starting around 1:30 p.m. Hong Kong time.  There was a bit of rally once the a.m. London gold fix was in at 10:30 GMT---and from there it traded flat until JPMorgan's HFT boyz and their algorithms showed up at the 8:30 a.m. EST job numbers report.  The low tick appeared to come about ten minutes after the 1:30 p.m. COMEX close---and the price edged unevenly higher for the remainder of the electronic trading session.

The high and low ticks were reported by the CME Group as 1,200.00 and $1,162.90 in the April contract.

Gold finished the Friday session in New York at $1,168.70 spot, down $29.30 from Thursday's close.  Net volume was pretty big at 185,000 contracts.  And as big as the volume was, I was expecting somewhat more than that.

Here's the 5-minute gold tick chart.  It goes all the way back to the close of COMEX trading on Thursday.  The Friday session starts at the 16:00 mark, as this chart is done for Mountain Standard Time, so you have to add 2 hours for EST.  Note the huge volume spikes when the HFT traders spun their algorithms.  The 'click to enlarge' feature really helps here. I thank Brad Robertson for sending this.

The price action in silver was the same, but different.  The price began to 'drift' lower starting shortly before lunch in Hong Kong---and got smacked below the $16 spot mark at 9 a.m. sharp in London trading.  I would guess that a decent sized short position was put on at that point.  From there it rallied into the jobs report---and although the HFT boyz huffed and puffed, the low tick of around $15.75 spot, which came minutes after 12 o'clock noon EST, was the best they could do.  From there it rallied rather impressively into the close---and well off its low.

The high and low ticks were recorded as $16.235 and $15.745 in the May contract.

Silver finished the Friday session at $15.925 spot, down 27.5 cents from Thursday's close.  Net volume was only 40,300 contracts.  A lot, yes, but like gold, I was sort of expecting more than this, so maybe this was all that JPMorgan et al could entice the technical funds traders in the Manged Money category into going short.  I'll have more on this in The Wrap.

The platinum price was manhandled by the HFT boyz almost exactly the same as gold.  So much so in fact, that their respective daily charts are virtually interchangeable.  Platinum was closed down $19 on the day to $1,157 spot.

The palladium chart looked similar, except the $810 low tick came shortly after 9:00 a.m. in New York---and it recovered a decent amount shortly after that, before chopping sideways into the 5:15 p.m. close of electronic trading.  Palladium finished the Friday session at $816 spot, down only 7 dollars.

The dollar index finished the Thursday trading session at 96.35---and began to develop a slight positive bias about the same time that the precious metals began to develop a negative bias.  The rally gathered more steam shortly after London opened---and of course the index went vertical on the job numbers---and most of the gains were in by the London p.m. gold fix.  The 96.73 high came during the New York lunch hour---and it didn't do much after that.  The dollar index finished that day at 97.72---which was up 137 basis points from Thursday's close.

Here's the 1-year U.S. dollar index chart, so you can see the flight to "quality" for yourself.  Doug Noland's commentary this week is headlined "King Dollar Tipping Point"---and it's further down in the Critical Reads section.

The gold stocks gapped down big at the open---and continued lower until gold's low tick, which came at 1:40 p.m. EST.  They rallied a bit from there, but some thoughtful soul/day trader bailed in the last few minutes before the close, taking the stocks back to almost their low ticks of the day.  The HUI got crushed to the tune of 7.47 percent.

The silver equities followed a similar pattern, with their lows coming at 13:40 p.m. EST as well.  From there they recovered a little into the close.  Nick Laird's Intraday Silver Sentiment Index closed down 6.09 percent.

As bad as the shares performed yesterday---and for the entire week, you have to wonder who was buying everything that was being sold.

For the week, the HUI declined by 13.29 percent---and the silver stocks by 11.76 percent.  Ouch!  I thank Nick Laird for providing that data last night.

Gold gave up all its gains for 2015 as well.

The CME Daily Delivery Report showed that zero gold and 17 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  Once again it was JPMorgan stopping 11 of those contracts in its in-house [proprietary] trading account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest for March fell by 5 contracts---and is now down to 148 contracts outstanding.  Silver's March o.i. also declined by 5 contracts---and it stands at 951 contracts remaining, minus the 17 posted above.  One has to wonder how many of these remaining contracts are owned by JPMorgan.  So far they've stood for delivery on more than 50 percent of the March silver contracts that have been issued.

I have more to say about this in my comments on the COT Report---and the companion Bank Participation Report further down.  Ted will certainly be revisiting this issue in his weekly review today as well.

There was another very decent withdrawal from GLD yesterday, this time an authorized participant removed 143,981 troy ounces.  And as of 6:51 p.m. EST yesterday, there were no reported changes in SLV.  It will be very interesting to see what withdrawals are forthcoming from these two ETFs next week.

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

Month-to-date the mint has sold 6,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and 587,000 silver eagles.  That puts the silver/gold sales ratio at 73 to 1.

There was a lot of in/out gold movement at the COMEX-approved depositories on Thursday, as 171,852 troy ounces were reported received---and 49,890 troy ounces were shipped out the door.  The link to that activity is here.

It was a bit quieter in silver, as 482,282 troy ounces were shipped in---and 111,735 ounces were shipped out.  The 'in' action was at Scotiabank---and the 'out' movement was at Brink's, Inc.  The link to that action is here.

Both Ted and I were hoping for a little bit of improvement in yesterday's Commitment of Traders Report, but we were both shocked to see huge improvements in both gold and silver---but there was absolutely nothing in the price action during the reporting week to justify the numbers that were in the report.

The only two reasons I can think of why this COT Report is this far out from what the price movements indicated it should be, is because the a correction was made because of prior reporting errors, or data was either accidentally or deliberately withheld.

But the numbers are what they are.

In silver, for positions held at the close of COMEX trading on Tuesday, the Commercial net short position declined by a chunky 2,435 contracts, or 12.2 million troy ounces.  The Commercial net short position is now down to 198.5 million troy ounces.  Because JPMorgan now has a long position of unknown size in silver to go along with their short-side corner, it was tough for Ted to nail down exactly what JPMorgan is net short, but I'm guessing between between 75 and 82.5 million troy ounces based on Ted's thoughts yesterday---which are certainly open for revision in his commentary to his paying subscribers this afternoon.

Ted said that the Big 4 traders decreased their short position by 1,500 contracts---and the '5 through 8' large traders decreased their short position by the same amount.  The rest of the Commercial traders, Ted's raptors, sold 600 long contracts.

But it was under the hood in the Disaggregated COT Report where the real surprise was, as the technical funds in the Managed Money category decreased their long position, plus added to their short position to the tune of 8,503 contracts in total!  That's a huge 1-week swing---and moves like that would normally affect prices far more substantially than what was shown in the reporting week.  That's why this week's COT Report in silver was such a surprise.

As much as the silver COT Report was a surprise, there was an even bigger surprise in gold.  There, the Commercial net short position declined by a very chunky 12,307 contracts, or 1.23 million troy ounces.  The Commercial net short position is now down to 12.34 million troy ounces.

Ted said that the Big 4 traders covered 3,200 contracts of their short position---and the '5 through 8' didn't do much, covering about 100 contracts.  The small commercial traders, the raptors, added 8,900 contracts to their already burgeoning long position.

Under the hood in the Managed Money category, the technical funds sold 9,316 long contracts---and added 7,212 short contracts, for a 1-week swing of 16,528 contracts, or 1.65 million ounces.  Once again, activity such as this should have had a far bigger impact on prices than what occurred.

Since the cut-off at the close of COMEX trading on Tuesday, "da boyz" have been taking small slices off the silver and gold salami every day since, culminating in the meat cleaver attack on Friday.  Without doubt, next week's COT Report  will show huge improvements in the Commercial net short positions once again, especially in gold.

The only unknown, as Ted and I were discussing, is just how willing the technical funds in the Managed Money category are prepared to go short on these ongoing engineered price declines.  They certainly did in gold yesterday, but with the blunted price action in silver, that may show that these traders don't have any more long positions to sell---and aren't prepared to short the silver market any further.  If that's the case, then the bottom is basically in for silver.

"Da boyz" can, like I said earlier, "huff and puff" all they want, but if the technical funds don't have any longs left to sell---and aren't prepared to go short any further than they already have, JPMorgan et al are stuck with the short positions they have---with no palatable way out.

I'll be more than interested in what Ted Butler has to say about all this as well.

Here's Nick Laird's now famous "Days of World Production to Cover COMEX Short Positions" of the 4 and 8 largest traders in all physical commodities on the COMEX.  I note that the short positions of the Big 8 traders in silver has dropped from 156 days down to 141 days of world silver production.  How's that for a short-side market corner?

Along with yesterday's Commitment of Traders Report came the companion Bank Participation Report [BPR] for the month of March.  And as I said in yesterday's missive---"This is data extracted directly from the 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, '3 or less' U.S. banks are net short 38,437 COMEX gold contracts, or 3.84 million troy ounces.  That's an improvement from the 5.67 million troy ounces that they were short in February's BPR.

Also in gold, '22 or more' non-U.S. banks were net short 51,151 COMEX futures contracts in gold, or 5.15 million troy ounces, which is down from the 7.63 million ounces they were short in February's BPR.  And I'm still of the opinion based on CFTC data from October 2012, that Canada's Scotiabank holds about one third of the non-U.S. bank short position all by itself.

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 was outed in October of 2012.

In silver, '3 or less' U.S. banks hold 3,865 COMEX contracts on the long side---and 17,364 contracts on the short side, for a net short COMEX position of 13,499 contracts.  [This compares to the 18,968 contracts these '3 or less' banks held net short in February's BPR.]  JPMorgan currently holds both long AND short contracts in silver, but it's a 100 percent certainty that they are net short a minimum of 15,000 contracts, which is more than the March net short position on its own.  The other two U.S. banks that could be on the long side would be HSBC USA and Citigroup.

Also in silver, '12 or more' non-U.S. banks are net short 22,734 COMEX futures contracts, an improvement from the 28,753 COMEX futures contracts they were short in February's BPR.  And in silver, as in gold, it's my opinion that Canada's Scotiabank is net short about 80 percent of this amount all by themselves.  As I've been saying for many months, it's also my opinion that Scotiabank is now the big silver short on the COMEX, but with JPMorgan not far behind.  Between them I'd guess they're short more than 30,000 but less than 35,000 COMEX contracts.

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 in Bear Stearns---the red bars.  It's very noticeable in Chart #4---and really stands out like the proverbial sore thumb in chart #5.

In platinum '3 or less' U.S. banks are net short 5,226 COMEX futures contracts---and that's down from the 7,522 contracts they were net short in the February BPR.

Also in platinum, '17 or more' non-U.S. banks are net short 8,469 COMEX contracts, down from the 9,782 they were collectively short in the February BPR.  It's a given that only one or two of these non-U.S. banks hold a material short position in this metal, at least compared to the gross and obscene short positions held by the '3 or less' [more likely '2 or less'] U.S. bullion banks.  That means that the short positions of the remaining 15 banks are not material, unless they're all trading together on cue---and it's impossible to know that.

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 20 percent of the entire COMEX futures market in platinum.

In palladium, '3 or less' U.S. banks are net short 8,285 COMEX futures contracts.  They've held this size of short position almost continuously for the past five months running.  They are net short a bit more than 25 percent of the entire futures market in this metal.

Also in palladium, '12 or more' non-U.S. banks are net short 3,085 COMEX futures contracts, that's an increase from the 2,370 contracts they were net short in February's BPR.  These non-U.S. banks are net short 12 percent of the COMEX futures market between them.  And unless they're acting in collusion, their short positions are immaterial.

Here's the BPR chart for palladium updated with the March report's 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.  Palladium as well.  And how about silver?

Along with a couple of Wall Street investment houses, 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.

I have a very decent number of stories for you today---and I hope you have enough time left in your weekend to read the ones that interest you the most.


¤ Critical Reads

Did the BLS Again Forget to Count the Tens of Thousands of Energy Job Losses?

A month ago we asked if the "BLS Forget To Count Thousands Of Energy Job Losses" when as we showed, the BLS reported that only 1,900 jobs were lost in the entire oil and gas extraction space, which was a vast underestimation of what is taking place in reality, when compared to not only corporate layoff announcements, but what Challenger had reported was going on in the shale patch, when it calculated that some 21,300 jobs were lost in January in just the energy sector.

Today we ask again: did the BLS once more forget to add the now tens of thousands of jobs lost in the US energy sector? We ask because the divergence is getting, frankly, ridiculous.

This Zero Hedge story showed up on their Internet site at 10:43 a.m. EST on Friday morning---and today's first article is courtesy of U.A.E. reader Laurent-Patrick Gally.


Americans Not in the Labor Force Rise to Record 92.9 Million as Participation Rate Declines Again

For those (very few now, with even the Fed admitting the unemployment rate has become a meaningless, anachronistic relic) still wondering why the unemployment rate dropped once again, sliding from 5.7% to 5.5%, the reason is that while the number of unemployed Americans dropped by 274K thousand while those employed rose by 96K, the underlying math is that the civilian labor force dropped from 157,180 to 157,002 (following the major revisions posted last month), while the people not in the labor force rose by 354,000 in February, rising to a record 92,898,000 (people who currently want a job rose to 6,538K) matching the all time high number of Americans not in the labor force.

End result: the labor force participation rate dropped once more, declining to only 62.8%, which as the chart below shows is just off the lowest print recorded since 1978.

That's all there is to this brief Zero Hedge piece that appeared on their website at 8:53 a.m. EST yesterday morning---and I thank Dan Lazicki for his first contribution of the day.  The charts are worth the trip.


Alan Greenspan Warns Stocks Are "Without Doubt Extremely Overvalued"

While America 'believes' it is highly productive, former Fed Chair Alan Greenspan instantly dispels that myth in another ominous appearance on CNBC this morning, "American productivity has gone nowhere in the last few years," and that is what is holding back wage growth. Furthermore, reiterating his concerns about the inverse relationship between surging entitlements and weak savings rates, Greenspan noted, "the annual rate of increase in entitlements of 9% per year...and the people that receive it believe they are getting their money back and have a right to it." There simply is no long-term investment as businesses favor short-term actions as the Maestro explains Fed QE lowering the real rate of interest "has been responsible for the rise in P/E multiples... and when rates normalize, that will reverse," adding that "we can't argue that we are extremely overvalued in the marketplace."

Greenspan explains... Productivity... Savings... Entitlements... Euro Failure... QE...Fed bubble-blowing... stock overvaluation and 1929 looms...

This 11:24 minute CNBC "Squawk Box" interview with Alan Greenspan was embedded in another Zero Hedge article from yesterday.  This one was posted on their website at 2:02 p.m. EST---and it's certainly worth watching.  It's the second article in a row from Dan Lazicki.


Goldman Shareholders’ Hope for Bigger Payout Dashed by Fed

Goldman Sachs Group Inc.’s cushion of extra capital in the latest Federal Reserve stress test isn’t enough for the firm to match last year’s payout of dividends and share repurchases.

The Fed projected Thursday that Goldman Sachs’s total risk-based capital ratio would fall to 8.1 percent in a severe economic downturn, weaker than what the central bank estimated in last year’s test and barely above the 8 percent minimum. The figure was below Goldman Sachs’s own calculation of 13 percent, as well as those of analysts including Credit Suisse Group AG’s Susan Roth Katzke, who estimated 11.3 percent.

Goldman Sachs’s narrow buffer in the Fed’s eyes would leave the New York-based firm with less than $1 billion in excess capital to pay out to shareholders beyond the dividends the firm has been disbursing. That’s dwarfed by the $5.47 billion it returned through buybacks in 2014, and the $6.5 billion that Katzke estimated the bank would return over the next five quarters.

This short Bloomberg article, filed from New York, showed up on their Internet site at 5:09 p.m. MST on Thursday afternoon---and I thank West Virginia reader Elliot Simon for sending it our way.


An Oil Firm That Raised Money Seven Months Ago Just Missed Its First Bond Payment

A Colorado oil producer is giving debt investors a lesson in the risks of lending to companies that staked their future on the U.S. shale boom.

Less than seven months after raising $175 million in a junk-bond offering, American Eagle Energy Corp. said Monday that it wouldn’t make its first interest payment on the debt. Instead, it hired two advisers -- Canaccord Genuity Group Inc. and Seaport Global Holdings LLC -- to negotiate with bondholders on a plan to restructure its debt, according to three people with knowledge of the situation who asked not to be named because the matter is private. The holders of the notes are left to consider how to maximize recovery of their investment, either by giving the company more time to try to become profitable or by pushing it into default.

With the price of U.S. crude down 52 percent since July, American Eagle and other small energy producers with significant debt loads are struggling to service obligations to creditors who were willing to lend them money just a few months ago. The energy sector represents about 14 percent of the high-yield bond market, and analysts expect defaults to increase this year as more companies are forced to scale back operations and record losses on oil reserves previously valued at much higher prices.

This Bloomberg news item, filed from New York, appeared on their Internet site at 9:42 a.m. Denver time on Thursday morning---and I thank Casey Research's own Bud Conrad for passing it around yesterday.


Inside the Currency Wars

Almost all the world’s currencies are dropping against the U.S. dollar. The decline is being driven mostly by governments and central banks bent on cheapening their currencies to gain an advantage in global trade and boost their weak economies. 

Since December, 22 major foreign currencies have declined an average of 4.5 percent against the greenback. A cheaper currency makes exports less expensive and thus more attractive to foreign buyers. A devalued currency also drives up import prices, which discourage domestic consumers from purchasing foreign goods. 

Group of 20 finance officials recently pronounced that the deliberate weakening of one's currency in pursuit of domestic growth is acceptable, while devaluation to gain a foreign-trade advantage is not. I fail to see the distinction, but U.S. Federal Reserve Chair Janet Yellen does. 

In Feb. 24 Senate testimony, Yellen opposed congressional efforts to add to trade agreements legal sanctions against countries that manipulate their currency because they could hobble the Fed. "Monetary policy," she said, "can have repercussions on exchange rates, but I really think it’s not right to call that currency manipulation and to put it in the same bucket as interventions in exchange markets that are really geared towards changing the competitive landscape to the advantage of a country.”

This commentary appeared on the Bloomberg website at 7:00 a.m. EST yesterday morning---and once again I thank Dan Lazicki for digging it up for us.


Doug Noland: King Dollar Tipping Point

From my perspective, Friday may have provided The Tipping Point for King Dollar.  The Dollar Index jumped 1.3% during Friday’s session to the highest level since 2003.  The dollar is now in its most powerful advance since King Dollar’s heyday back in the late-nineties.  The King Dollar speculative dynamic is also turning highly destabilizing.  

Interestingly, at the top of the Periphery Fragility List, Brazil and Turkey saw their currencies this week hammered 7.3% and 4.4%, respectively.  Brazilian (real) 10-year bond yields surged 69 bps to 12.97%.  Brazilian stocks were hit for 3.1%, giving back all 2015 gains.  Turkish (dollar) yields jumped 37 bps this week to the highest level since December (4.68%).  Turkish stocks sank 4.6%, also to the low since December.  

Despite all the talk of global deflation risk, Brazil and Turkey (among others) have inflation problems.  Bloomberg:  “Brazil Posts Fastest Annual Inflation in Almost a Decade.”  Consumer price inflation has been running above 9% in Turkey for much of the past year.  Rapidly devaluing currencies now exacerbate inflationary pressures – the ugly old vicious cycle taking hold (that the printing press can’t rectify).

Meanwhile, the global situation – markets, economies and geopolitics - turns progressively unstable.  At this point, I am highly confident in my thesis that the global Bubble has been pierced (with profound ramifications!).  This view is supported by the self-reinforcing nature of the collapse in energy and commodities prices along with faltering emerging market currencies.

Today's Credit Bubble Bulletin is definitely worth reading---and I thank reader U.D. for sending it our way.


Britain’s Elite Still Enjoying a Tax Break 100 Years Old

They are among the British moneyed elite: the head of the nation’s largest bank, a billionaire hedge fund manager and the owner of some of London’s most luxurious nightclubs.

Yet for tax purposes, they are not entirely British.

Thanks to a law from when Britain had an empire, a growing number of the rich and internationally mobile here do not have to pay tax on their foreign income or assets, only on the money they earn in Britain. They are the “non-domiciled,” or non-doms.

To qualify for that status, they simply need to show that their fathers were born outside Britain and that they intend to someday return to that place. Alternatively, they can choose a new permanent home — Hong Kong with its low tax rate is popular — return to Britain and demonstrate their intention to go back to their new permanent home by, for example, buying a grave plot there or drawing up a local will.

This very interesting article showed up on The New York Times website back on Monday---and for content reasons had to wait for Saturday's column.  I thank Phil Barlett for finding it for us.


Draghi Declares Victory for Bond-Buying Before It Starts

Mario Draghi is claiming victory for his quantitative-easing program before it even starts.

As the European Central Bank president set a start date of Monday for his 1.1 trillion euro ($1.2 trillion) bond-buying program, he said the stimulus will spur the euro area’s fastest economic growth since 2007 and return inflation to the ECB’s goal within three years.

The bullish tone after policy makers met in Nicosia on Thursday signals optimism that what Draghi called the ECB’s “final set of measures” will restore the 19-nation currency bloc to health. The risk is that this is just yet another false dawn, leaving the central bank needing to do more.

“Draghi had a tough battle to reach the QE compromise, now of course he wants to promote it as much as possible,” said Thomas Harjes, senior European economist at Barclays Plc in Frankfurt. “He gave a strong statement that QE will deliver.”

I commented on Draghi's optimism the other day when I said it sounded like "whistling past the graveyard".  I still think that.  This Bloomberg article, co-filed from Paris and Frankfurt, appeared on their website yesterday sometime---and it's the second offering of the day from Elliot Simon.


IMF Director Admits: Greek Bailout Was "To Save German and French Banks"

For the first time in public, though practically the entire world assumed it, an official from The IMF has admitted that the various Greek bailouts were not for The Greeks at all... "They gave money to save German and French banks, not Greece,” Paolo Batista, one of the Executive Directors of International Monetary Fund told Greek private Alpha TV on Tuesday.

As KeepTalkingGreece reports, Batista then went on to strongly criticized not only the euro zone and the European Central Bank but also the IMF and the Fund’s managing Director Christine Lagarde for defending Europe much too much...

This is another Zero Hedge piece from late Thursday afternoon EST---and I thank Norman Willis for sharing it with us.


Negative interest rates threaten Swiss pensions

The Swiss National Bank’s removal of the minimum exchange rate of CHF1.20 to the euro in January and institution of negative interest rates could have grave consequences for Swiss pensions, say economists from the largest Swiss bank, UBS.

The UBS economists analysed the potential effects of a variety of interest rate scenarios. The results show burdens on the real economy, significant interest rate risks, additional pressures on banks to consolidate, and a serious impact on pension funds, UBS announced at a press conference on Friday.

“It is at least as serious for the economy as ending the floor to the euro, and could even be more serious," said Lukas Gähwiler, head of UBS Switzerland, in reference to the long-term impact of the negative interest rate environment.

No surprises here, as negative interest rates are a danger to everyone.  This article showed up on the Internet site at 10:59 a.m. Europe time on their Friday morning---and I thank South African reader B.V. for bringing it to our attention.


Europe holds 'noose around Greek necks' as Athens scrambles to make debt payments

Greece's prime minister has accused the European Central Bank of holding a noose around the country's neck as his government rushes to assure creditors it can avert bankruptcy this month.

Speaking in an interview with Der Spiegel magazine, Alexis Tsipras appealed to the ECB to alleviate pressure on the cash-strapped country.

The ECB "is still holding the rope which we have around our necks" said Mr Tsipras, referring to the central bank's reluctance to resume ordinary lending to Greek banks at a meeting in Cyprus on Thursday.

The central bank has also rebuffed Greek appeals to raise the limit on short-term debt issuance, as it faces €6.5bn in payments over the next three weeks.

This news story appeared on the Internet site at 9:00 p.m. GMT on Friday evening---and I thank Roy Stephens for sending it our way.  It's worth reading.  There was also a story about this on the website yesterday evening as well---and it's headlined "Pessimism ahead of key eurozone meeting on Greece".  It's also courtesy of Roy Stephens.


Ukraine, Neocons And Neonazis

See, by now you would think that anyone who reads that all 31 US banks that were tested have passed the Fed stress test, knows this says absolutely nothing about the banks, but all the more about the test. You would think. But the media try – and succeed – to cram it down the public’s throat as a success story anyway.

There’s simply a very strong feeling, if not conviction, in the western media, that they’ve won the propaganda battle. They have no adversary other than the blogosphere, and since they reach a thousand times more people, who are to a (wo)man more complacent and gullible than any of your typical interwebs readers, Bob’s their uncle.

But come on guys, are we really going to let this happen without raising our voices or even batting as much as one of our eyes? We’re drowning in nonsense here, and we’re prepared to just die without even trying to swim?

This longish, but very interesting commentary appeared on the Zero Hedge Internet site at 5:30 p.m. EST on Friday evening---and I thank reader Jim Skinner for pointing it out.


Breedlove's Bellicosity: Berlin Alarmed by Aggressive NATO Stance on Ukraine

U.S. President Obama supports Chancellor Merkel's efforts at finding a diplomatic solution to the Ukraine crisis. But hawks in Washington seem determined to torpedo Berlin's approach. And NATO's top commander in Europe hasn't been helping either.

It was quiet in eastern Ukraine last Wednesday. Indeed, it was another quiet day in an extended stretch of relative calm. The battles between the Ukrainian army and the pro-Russian separatists had largely stopped and heavy weaponry was being withdrawn. The Minsk cease-fire wasn't holding perfectly, but it was holding.

On that same day, General Philip Breedlove, the top NATO commander in Europe, stepped before the press in Washington. Putin, the 59-year-old said, had once again "upped the ante" in eastern Ukraine -- with "well over a thousand combat vehicles, Russian combat forces, some of their most sophisticated air defense, battalions of artillery" having been sent to the Donbass. "What is clear," Breedlove said, "is that right now, it is not getting better. It is getting worse every day."

German leaders in Berlin were stunned. They didn't understand what Breedlove was talking about. And it wasn't the first time. Once again, the German government, supported by intelligence gathered by the Bundesnachrichtendienst (BND), Germany's foreign intelligence agency, did not share the view of NATO's Supreme Allied Commander Europe (SACEUR).

This longish essay appeared on the German website at 7:47 p.m. Europe time yesterday evening---and it's certainly a must read.  It's the second offering in a row from Jim Skinner.


Mike Whitney: How Putin Blocked the U.S. Pivot to Asia

Putin:  “Today we are witnessing an almost unconstrained hyper use of force that is plunging the world into an abyss of permanent conflicts…The United States, has overstepped its national borders in every way….and of course this is extremely dangerous. It results in the fact that no one feels safe. I want to emphasize this — no one feels safe.”  Vladimir Putin, Munich 2007

Putin isn’t a perfect man. He has his shortcomings and flaws like everyone else. But he appears to be a decent person who has made great strides in restoring Russia’s economy after it was looted by agents of the US following the dissolution of the Soviet Union. He has lifted living standards,  increased pensions,  reduced poverty, and improved education and health care which is why his public approval ratings are currently hovering at an eye-watering 86 percent.  Even so, Putin is most admired for standing up to the United States and blocking its strategy to pivot to Asia. The proxy war in Ukraine is actually a struggle to thwart Washington’s plan to break up the Russian Federation, encircle China, control the flow of resources from Asia to Europe,  and rule the world.   Vladimir Putin is at the forefront of that conflagration which is why he has gained the respect and admiration of people around the world.

As for “democracy”, Putin said it best himself:

Am I a ‘pure democrat’? (laughs) Of course I am. Absolutely. The problem is that I’m all alone, the only one of my kind in the whole world. Just look at what’s happening in    America, it’s terrible—torture, homeless people, Guantanamo, people detained without trial or investigation.   And look at  Europe—harsh treatment of demonstrators, rubber bullets and tear gas used in one capital after another, demonstrators killed on the streets… I have no one to talk to since Gandhi died.

This long commentary by Mike Whitney falls into the absolute must read category if you're a serious student of the New Great Game.  It put in an appearance on the Internet site on Friday sometime---and I thank Roy Stephen for sending it my way late last night Mountain Standard Time.


Crazed Washington Drives the World to the Final War -- Paul Craig Roberts

John Pilger is the kind of well-informed, hard-hitting journalist with gobs of integrity that no longer exists in the Western mainstream media. He has the most distinguished career of all in the business.

In the article below he brings stunning information to one of my own themes–the creation by Washington and its NATO vassals of an artificial reality consisting entirely of propaganda into which Washington has placed the entire Western world and all outside who inspire to be part of it. Westerners live in The Matrix, and the presstitutes keep them there. The New York Times, Wall Street Journal, NPR, and the TV channels perform as agents (as in the Matrix film) actively suppressing any glimmer of factual reality.

Western people have no comprehension of the real reasons for Washington’s murderous interventions in Yugoslavia, Middle East, Afghanistan, Libya, Ukraine, Indonesia, or Latin America. The most transparent lies are fed to people too ignorant to recognize the lies. The lies have cost huge numbers of deaths and injuries and are leading directly to war with Russia and China.

It is probably too late to stop this war. The war is inevitable because Washington’s doctrine of world hegemony does not permit the existence of other strong countries with independent foreign policies. Unless the House-of-Card US economy collapses, the only way Russia and China can avoid war is to accept Washington’s overlordship.

I posted this John Pilger piece that Paul refers to in my column last Saturday---and if you never got around to reading it, you should make amends now, as it falls into the absolute must read category---and I thank Dan Lazicki for another contribution to today's column.


Iran would sell more oil if Western sanctions lifted: Mehr agency

Iran said oil prices would not rise above US$60 a barrel until 2016 and that it would increase crude exports if Western sanctions over its nuclear program were lifted, the semi-official Mehr news agency reported on Friday.

"We're not expecting oil prices to go over US$60 until 2016. What will happen after that is not clear," Mehr quoted National Iranian Oil Co's head of international affairs, Mohsen Ghamsari, as saying.

"When sanctions are lifted, it is our natural and legal right to increase our oil sales in an effort to raise market share."

U.S. and E.U. sanctions that came into force in 2012 prohibit the import, purchase and transport of Iranian petroleum products.

This story put in an appearance on the Internet site on Friday afternoon local time---and I thank International Man senior editor Nick Giambruno for passing it around yesterday.


Japan Now Spends 43% of Tax Revenue to Fund Interest on Debt

Japan is a land of irony and dichotomy. It is one of the most conservative cultures in the world, while simultaneously being one of the most perverted.

Business culture here is yet another thing that seems totally alien. Creativity and innovation are constrained by process and procedure. The individual is never celebrated, and dutiful compliance is everything.

In Japanese corporate culture, business meetings follow a strict agenda. New ideas, no matter how valuable, are simply not welcome.

They actually have a term here called nemawashi, which is a meeting before a meeting. The idea being that if you have an idea to present at a meeting, you need to discuss it first so that nobody’s caught off guard or embarrassed by not having a prepared response.

This is a cultural nuance that is completely lost on most Westerners. It stems from this mindset that everyone has an obligation to make sure that nobody else looks bad.

This very interesting commentary by Simon Black over at the Sovereign Man certainly falls into the absolute must read category---and it's courtesy of Roy Stephens.  It was posted on the Zero Hedge website at 5:01 p.m. EST on Thursday afternoon.


The Second Round of the Crisis Will DWARF 2008 In Size and Scope

If you are an investor, your big concern should not be about what to stocks… but what happens when the bond bubble goes bust.

All of the biggest problems in the financial world revolve around the bond markets today:

1)   Greece’s sovereign debt crisis

2)   The Bank of Japan is purchasing ALL new debt issuance in Japan.

3)   The Fed is terrified of higher interest rates because ever 1% change means over $100 billion more in interest payments on the US debt.

For 30+ years, sovereign nations have been papering over the decline in living standards by issuing debt. In its simplest rendering, sovereign nations spent more than they could collect in taxes, so they issued debt (borrowed money) to fund their various welfare schemes.

This short, but very worthwhile read by Phoenix Capital Research appeared on the Zero Hedge website at 11:34 a.m. on Thursday morning EST---and I thank Brad Robertson for sending it along.


The Weirdest Thing You'll See Today

You know that we talk a lot about the insane level of government interference in our lives. About what we can and cannot put in our bodies. The amount of interest we’re entitled to receive on our savings. Etc.

But I’m noticing now even more ridiculous trends of governments wanting to get involved in people’s sex lives.

Last year the Danish government promoted an initiative called “Do it for Denmark”, encouraging Danes to travel abroad and have sex while on holidays. They even have a pretty racy Youtube video featuring a scantily clad gorgeous blonde waiting to do her duty for her country and procreate.

This rather titillating, but very interesting article deals with many countries efforts to increase their rapidly declining birth rates.  This is a serious problem in first world countries, particularly Japan.  This must read commentary is another piece by Simon Black over at the Sovereign Man---and it, too, was posted on the Zero Hedge website.  It showed up there at 3:47 p.m. EST yesterday---and it's another contribution from Dan Lazicki.


Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his thoughts on the latest U.S. employment data, stagnant economic recovery, and volatility in international currencies that provides another reason to buy gold.

This 7:01 minute audio interview with Eric was conducted by Sprott Money's Geoff Rutherford---and it was posted on the Internet site yesterday.


Who Knew What When In Gold and Stocks This Morning?

Gold trading this morning had some oddities. This was more than the normal shenanigans as just before the official release time of 0830ET, gold started to drop then accelerated past the official release time. But... the actual headlines hitting news wires were delayed because of the lack of lock-up and as is clear below, the 'real' selling did not start until those headlines hit. So was this auto-algo selling at 0830 no matter what to ensure markets got the message... or did someone get the unlock-up'd headlines 'earlier' than everyone else?

This tiny Zero Hedge piece, with two interesting charts, appeared on their website at 11:44 a.m. EST on Friday morning---and I thank Dan Lazicki for his final offering in today's column.


Hillary Clinton’s Brother Granted Super-Rare Gold Mining Permit from Haiti

Hillary Rodham Clinton’s brother, Tony Rodham, sat on the board of a self-described mining company that in 2012 received one of only two “gold exploitation permits” from the Haitian government—the first issued in over 50 years.

The tiny North Carolina company, VCS Mining, also included on its board Bill Clinton’s co-chair of the Interim Haiti Recovery Commission (IHRC), former Haitian Prime Minister Jean-Max Bellerive.

The Rodham gold mine revelation is just one of dozens featured in a forthcoming bombshell investigative book by three-time New York Times bestselling author Peter Schweizer, according to a Thursday statement from publishing giant HarperCollins.  The publisher says the book, Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich, is the culmination of an exhaustive one-year deep dive investigation into the nexus between the Clintons’ $100+ million personal wealth, the Clinton Foundation, and the decisions Hillary made as Secretary of State that benefited foreign donors, governments, and companies.

VCS’s coveted gold mining exploitation permit was apparently such a sweetheart deal that it outraged the Haitian senate, since royalties to be paid to the Haitian government were only 2.5%, a sum mining experts say is at least half the standard rate. Moreover, the mining project in Morne Bossa came with a generous ability to renew the project for up to 25 years. Nevertheless, the fledgling company proudly touted its luck in landing the deal.

This story was posted on the Internet site on Thursday sometime---and it's another contribution from Brad Robertson.


1968 magazine article shows how control of gold is main mechanism of imperial power

Thanks to GATA's friend D.H. for calling attention to an article, "The Sieve of Gold," from the May 1968 edition of the late magazine Ramparts,  which describes the longstanding U.S. government policy to push gold out of the international financial system in favor of the U.S. dollar; the increasing recognition by other nations that this constituted imperialism and made the dollar in effect a tax on the world; the collapse of the London Gold Pool; and the underlying cause of the enormous stress on the world financial system at that time, the Vietnam War.

While the London Gold Pool is no more, it has been replaced by the far more sophisticated U.S.-backed gold price suppression system of gold leasing by Western central banks and high-frequency trading by their bullion bank agents in the gold market. The U.S. national strategy, the defense of the dollar as the imperial currency controlling the world, remains unchanged.

Hudson's "The Sieve of Gold" has been posted in PDF format at GATA's Internet site.  This is your big read of the day---so if you want to put today's circumstances into some sort of historical perspective, this is a good place to start.  It was posted on the Internet site last Saturday---and for length reasons had to wait for this Saturday's column.  If you have the time or the interest, it's definitely worth your while.


Alasdair Macleod: The new London gold fix and China

This month the physical gold market will undergo radical change when the four London fixing banks hand over the twice-daily fix to the International Commodity Exchange's trading platform on 20th March.

From 1st April the Financial Conduct Authority will extend its powers from regulating the participants to regulating the fix as well. This will transfer price control away from the bullion banks allowing direct access to the fixing process for all direct participants and sponsored clients.

From this flow two important consequences. Firstly, the London market is changing from an unregulated to a partially regulated market, reducing room for price manipulation. And secondly, the major Chinese state-owned banks, assuming they register as direct participants, have the opportunity to dominate the London physical market without having to deal through one of the current fixing banks. No announcement has been made yet as to who the direct participants will be, but it is a racing certainty China will be represented.

This longish, but very worthwhile commentary, was posted on the Internet site on Friday GMT sometime---and the first reader through the door with it was "Paul C".


Chinese Gold Fixing to Have ‘Decisive Influence’ on Global Prices

China's planned gold fixing will promote the country's interests and provide it with a "decisive influence" on global prices, Zhang Lei, chief gold analyst with the Beijing Gold Exchange Center, told Sputnik on Friday.

"Chinese gold fixing will directly reflect domestic prices on the Chinese market, and gradually introduce its own rules to the global gold market," Zhang said, adding that this will grant China a "decisive influence on the establishment of the gold price."

Local media reported earlier in the week that Chinese banks will take part in the ICE Benchmark Administration's new gold fixing system, set to replace the nearly century-old London gold fix.

Yuan-denominated gold fixing will complement the new mechanism, and gradually promote the interests of the Chinese market, according to Zhang.

These four paragraphs are all there is to this article that was filed from Beijing yesterday.  It was posted on their Internet site at 7:29 p.m. Moscow time on their Friday evening---and it's something that I found on the Sharps Pixley website in the wee hours of this morning EST.



¤ The Funnies

These three shots are the last from the Sedona area.

This first is just a general shot on one of the many walks around the area---and you don't have to go far to find a photo op in this place.  I must admit that this much red ochre colour in all directions was something I never quite got used to, although it made for spectacular photos.  Green grass seems to be easier both on the eyes---and the soul.  Don't forget the 'click to enlarge' feature.

The second and third photo are ones I cropped for maximum visual impact, as there was too much sky---and there was a fence in the foreground of photo #2 that I couldn't get rid of any other way, but you can see a bit of it in photo #3.  These were taken as a left-to-right 2-photo collage from the top of the mesa where the Sedona airport is situated---and overlooks part of the town.  It's an absolutely spectacular setting---and I'd never seen anything like it before---and I've been around.

This is a head and shoulders shot of a Philippine tube-nosed fruit bat.  I didn't take it.

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¤ The Wrap

I’m still of a mind that there may be 40,000 long contracts of non-technical funds in the managed money category not likely to be liquidated on lower prices. So it’s hard for me to see where all the selling will come from that would enable the big commercial shorts to buy back significant numbers of short contracts. After all, the commercials can’t buy COMEX silver (or gold) contracts from the ether; there must be a contract sold for every contract bought. Nothing would make me happier than to see the big silver commercial shorts run out of room to rig prices lower because of a lack of technical fund selling capacity, but I also know how crooked these commercial shorts are---and must consider that if they are stuck, they are likely to resort to extreme measures rather than go down without a fight (to lower prices). A wild card here is that if JPMorgan is as heavily long physical silver as I imagine, they could always survive and prosper on higher silver prices despite holding a big short position. If your physical long position is much larger than your paper short position, that means you are net long and not afraid of higher prices.Silver analyst Ted Butler: 28 February 2015

Today's pop 'blast from the past' is from about 50 years ago.  I remember it well, as it was from 1966---my last year in high school.  Anyone of my vintage should know it---and the group---instantly.  The link is here.  And while I'm at it, here's another one of their hits, this one from 1967.

Today's classical 'blast from the past' is one I've wanted to feature for ages, but could never find a recording on that I liked---and I still haven't, so the one here will have to do.  It's the incomparable Dutch violinist Janine Jansen playing the fiddle in Ralph Vaughan Williams classical composition "The Lark Ascending".  I heard it on CBC-FM yesterday---and figured the time was right.  The link is here.

Well, it turned out as I feared---and it's a given that the technical funds in the Managed Money category pitched the rest of their long positions and went massively short in both gold and silver yesterday, especially in gold.  That's the only reason that prices went down yesterday.  We'll have to wait until next Friday's COT Report to see the numbers.

I'm guessing that "da boyz" will show up at the open on Sunday evening to press their advantage further, but it appears that we're at, or close to another major bottom.  The next two trading days should tell us a lot.  If you're looking to "place your bets"---I would guess that the time is at hand.

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

As you can tell from the RSI traces, we're already oversold in gold---and fast approaching it in silver and platinum.

Can we go lower from here?  I suppose, but as I said further up---and Ted mentioned in the quote of the day---once the Managed Money traders decide that they're full up on the short side, the bottom will be in.  And as I said, once that occurs, JPMorgan et al can "huff and puff" all they want, but it won't matter, as the law of diminishing returns comes into play rather quickly---and they know it.

So we wait some more.

As far as I can see in all directions, it's wall-to-wall ugly out there---and I see no way that the current economic, financial and monetary situation is going to resolve itself quietly.  Everything has this "Alice in Wonderland" feel to it at the moment---and there's some sort of Potemkin village down every rabbit hole I look---dead ends in all directions.

How long the world can continue to muddle along in this state remains to be seen, but whatever end awaits us, it won't be pretty.

And when this situation does resolve itself, it would be a reasonable assumption that the precious metals will be sporting new prices---and the price management scheme in the COMEX futures market will be relegated to the dustbin of history.

China and Russia, either individually or collectively, are certainly in a position to end it any time they wish---and as I've said on numerous occasions, they may do so if it's in their best interests. 

And the moment that they, along with the other "hewers of wood---and drawers of water" on Planet Earth decide to rise up against the current Western establishment---and put their markers down on this 21st century form of enslavement, there will certainly be a New World Order, but it won't be the one that the current powers-that-be have in mind.

See you on Tuesday.

Ed Steer