Gold & Silver Daily

¤ Yesterday In Gold & Silver

The HFT boyz and their algos didn't waste much time during the Friday trading session in gold, setting three new consecutive low ticks during the trading session.  The first came an hour before London opened, another at 10:40 a.m. EDT---and the last one coming in electronic trading about forty minutes after the Comex close.

The high and low prices for yesterday's trading session were recorded by the CME Group as $1,242.30 and $1,228.10 in the December contract.

Gold finished the Friday session at $1,228.30 spot, down $11.90 from Thursday's close.  Net volume was around 130,000 contracts.

Once again, the 6 p.m. Thursday evening open in silver started with a down tick.  That's happened every day this month so far.  Silver's low tick---and new low for this move down---came shortly after 10 a.m. Hong Kong time on their Friday morning.  The low was retested shortly before 1 p.m.---and the rally into the London open, ended at the open.  After that it chopped sideways and never got a sniff of positive territory for the remainder of the day.

The high and low ticks were recorded as $18.72 and $18.455 in the December contract.

Silver closed on Friday at $18.61 spot, down 6 cents from Thursday.  Net volume was around 37,500 contracts.

The platinum and palladium salamis also got sliced to new lows for this move down, but at different times of day.  Both precious metals rallied back and closed well off their lows: platinum for a slight loss---4 bucks---and palladium actually closed up 3 bucks.  Here are the charts.

The dollar index closed late on Thursday afternoon in New York at 84.27---and spent all of Friday chopping quietly lower, as the index closed at 84.22---down 5 basis points on the day.

As I said yesterday, what the dollar index is doing doesn't have much to do with the activity in the precious metals, but it makes a great talking point when that's the only thing that the price movement can be pinned on.  And, at times, JPMorgan et al use it maximum advantage, like now for instance.

The gold stocks opened down a percent---and barely got a glimpse of positive territory, but they did close off their lows by a little.  The HUI closed down 1.38%.

The price path of the silver equities was very similar but, as usual, they got sold down harder, as Nick Laird's Intraday Silver Sentiment Index closed down 2.39%.

The CME Daily Delivery Report showed that 25 gold and 26 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that the number of gold contracts open in September rose by 24 contracts---and now stands at 45 contracts.  In silver, that number declined by 123 contracts---and there are now 612 silver contracts still open in September.

There were no reported changes in GLD yesterday---and as of 6:56 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

But I checked back on the Internet site about three hours later---and saw to my amazement that another 3,356,976 troy ounces had been deposited by an authorized participant.  Almost 8 million ounces of silver has been deposited in SLV during the first ten business days of September---and since the SLV's low of 321.2 million ounces on June 22nd of this year---18.2 million ounces of silver have been deposited.  The WTF alarm bells should be ringing loudly that something is definitely going on 'under the hood' in the silver market.

There was a small sales report from the U.S. Mint yesterday.  They sold 2,000 troy ounces of gold eagles---and 30,000 silver eagles.

Month-to-date the mint has sold 23,000 troy ounces of gold eagles---4,000 one-ounce 24K gold buffaloes---810,000 silver eagles---and 200 platinum eagles.  Based on these sales, the silver gold ratio for September stands at 30 to 1, which is decidedly on the low side, as silver eagle sales have sagged since the big buyer disappeared several months ago.

There was no in/out activity in gold worthy of the name at the Comex-approved depositories on Thursday.  But, as usual, it was exactly the opposite in silver, as 1,156,984 troy ounces were reported received---and a further 238,833 troy ounces were shipped out.  Most of the in/out activity was at Canada's Scotiabank---and also at the CNT Depository.  The link to that action is here.

I must admit that I was more than underwhelmed by yesterday's Commitment of Traders Report.  Although the numbers were headed in the right direction in both silver and gold, they weren't the big numbers that both Ted and I were expecting.  In a word, it was disappointing, considering the fact that we carved new low ticks in both metals every day during the reporting week ending on Tuesday, June 9.

In retrospect---and a closer examination of the price charts for the reporting week---even though there were new lows set every day, the salami slices were pretty tiny.

In silver, the Commercial net short position only improved by 2,342 contracts, or 11.7 million ounces.  The Commercial net short position is still pretty hefty at a hair under 30,000 contracts, or 150 million troy ounces.

In the Managed Money category of the Disaggregated COT Report, these brain dead traders continued to pitch longs and go short, which is what their black boxes were telling them to do---so that's what they did.  In the latest report they sold 1,842 long contracts---and added another 1,457 short contracts---which is a swing of 3,299 contracts in total.

Ted says that JPMorgan reduced their short-side corner in the Comex silver market by about 3,000 contracts---and he pegs their current position around 14,000 contracts, or 70 million ounces, just under half of the current Commercial net short position.  And I'd be happy to bet $100 in the currency of your choice that Canada's Scotiabank is short the rest---and more.

In gold, the Commercial net short position declined by only 5,752 contracts, or 575,200 troy ounces of gold.  The Commercial net short position declined marginally to 9.80 million troy ounces.

Ted said that JPMorgan added a couple of thousand contracts to their long-side corner in the Comex gold market---and it now stands at 25,000 contracts, or 2.5 million troy ounces.

Without a doubt there was further improvement since the 1:30 p.m. cut-off on Tuesday, as the HFT boyz that work for JPMorgan et al continued to slice the salamis to the downside in all four precious metals.

Undoubtedly, this will manifest itself in next Friday's COT Report, but after a disappointing report yesterday, I shan't hazard a guess as to how much improvement there might be.  However, there are still two more reporting days to go between now and the Tuesday cut-off---and anything can happen between now and then in the silver market, which is getting more psychotic with each passing day.

I have much more to say about this situation in The Wrap at the bottom of today's column.

Even though it's my Saturday column, I don't have all that many stories.  Normally I have a decent amount.  I hope you have enough time in what's left of your weekend to read the ones you like.


¤ Critical Reads

Yahoo Faced $250,000-Day Fine for Not Giving U.S. User Data

Yahoo! Inc. said the U.S. government threatened in 2008 to fine it $250,000 a day for refusing to comply with national security-related requests for its users’ Internet data.

In small victory for Yahoo’s legal challenges to U.S. surveillance practices, a court today permitted the company to release 1,500 pages of documents that shed light on the scope and force of the government’s data-collection methods.

The company and competitors including Google Inc. and Facebook Inc. have been trying to protect their reputations following revelations that began in June 2013 by former government contractor Edward Snowden that the National Security Agency had access to information about the Internet use of the companies’ customers. Yahoo first challenged the NSA requests in court in 2007-2008.

This news item showed up on the Internet site at 6:27 p.m. EDT on Thursday evening---and it's courtesy of West Virginia reader Elliot Simon.


IEA again cuts forecasts for oil demand

The International Energy Agency Thursday trimmed its forecast for the rise in oil demand this year for the third month in a row, calling the recent slowdown in demand “nothing short of remarkable.”

In its closely watched monthly oil market report, the Paris-based energy watchdog said it expects global oil demand to grow by 0.9 million barrels a day in 2014, a decrease of 65,000 barrels a day compared with last month’s forecast and down by 300,000 barrels a day since July.

According to the IEA, oil demand growth in the second quarter was at its lowest in 2½ years, dented by economic weakness in Europe and China, a trend the agency expects will continue to weigh on demand.

This article appeared on the Internet site at 5:18 a.m. EDT on Thursday morning---and I thank 'David in California' for sharing it with us.


Alasdair Macleod: Currency turbulence

You'd think that the U.S. dollar has suddenly become strong, and the chart below of the other three major currencies confirms it.

The U.S. dollar is the risk-free currency for international accounting, because it is the currency on which all the others are based. And it is clear that three months ago dollar exchange rates against the three currencies shown began to strengthen notably.

However, each of the currencies in the chart has its own specific problems driving it weaker. The yen is the embodiment of financial kamikaze, with the Abe government destroying it through debasement as a cover-up for a budget deficit that is beyond its control. The pound is being poleaxed by a campaign to keep Scotland in the union which has backfired, plus a deferral of interest rate expectations. 

And the euro sports negative deposit rates in the belief they will cure the Eurozone's gathering slump, which if it develops unchecked will threaten the stability of Europe's banks.

So far this has been mainly a race to the bottom, with the dollar on the side-lines. The US economy, which is officially due to recover (as it has been expected to every year from 2008) looks like it's still going nowhere. Indeed, if you apply a more realistic deflator than the one that is officially calculated, there is a strong argument that the US has never recovered since the Lehman crisis.

This commentary by Alasdair was posted on the Internet site on Friday BST sometime---and I plucked it from a GATA release yesterday.


Martin Hutchinson: The death spiral of capitalism

No less than six sovereign borrowers are now paying negative nominal interest rates on their 2-year borrowing in euros. In other words, they are making money by going into debt. In real terms, medium-term U.S. TIPS and British index-linked gilts have had negative interest rates for several years. Contrary to the views of the happy Keynesians around us, this is very dangerous indeed. If negative interest rates were to persist, the world's stock of capital would eventually disappear. Without capital, we'd be back up the trees.

You don't even have to be a decent credit risk to borrow money at negative interest rates in euros—France's 2-year bond yield has just turned negative. Since France hasn't balanced its budget since 1969 and is enduring a prolonged period of stagnation caused by having one of the world's largest public sectors, to rational investors it ranks as a credit with substantial risk. Of course, today's bond-market investors aren't rational; their brains are fogged by six-years-and-counting of monetary "stimulus."

Negative interest rates are damaging for savers, who can't earn a return on their money without taking undue risks. However, over time they are even more damaging to the financial system as a whole because they reduce the capital stock outstanding, thereby de-capitalizing the economy. If risk-free interest rates are minus 1% in real terms, then after a year the capital stock is 1% smaller than it had been a year earlier (absent substantial net new savings). Of course, some investors have earned positive real returns by taking risks, but over the business cycle as a whole, those returns will disappear, as the risks turn out to have been misguided.

This longish essay, which is certainly worth reading if you have the time, was posted on the Internet site on Monday.


Doug Noland: "King Dollar and the Peripheries"

An interesting week saw that Brazilian real get hammered for 4.2%, as Brazil’s stocks sank 6.2%. Venezuela Credit default swap (CDS) prices surged 158 bps to 1,464 bps (lagging Argentina at 1,840!). Turkish stocks were hit for 5.3%, in what Bloomberg called the emerging-market stocks’ “steepest decline in 15 months.” Commodities currencies were also pummeled. The Australian dollar dropped 3.6%, the South African rand 3.0%, the New Zealand dollar 2.1% and the Canadian dollar 1.9%. The Goldman Sachs Commodities Index was hit for 2.4%, trading this week to the lowest level since the tumultuous summer of 2012. Brent crude fell to a two-year low, wheat to a 50-week low and gold to an eight-month low. Spanish yields jumped 30bps, with Italian yields up 20 bps and France’s 17 bps. U.S. junk bond CDS jumped 21 bps this week. In the face of unsettled global risk markets, 10-year Treasuries jumped 15 bps this week.

Market and macro analysis remains extraordinarily challenging. The U.S. economy shows momentum and financial conditions remain ultra-loose. Wall Street strategists are universally bullish. A recent survey (Investors Intelligence) had the smallest reading of bears since 1987. Sentiment is buoyed by the view that it will be years before the Fed raises rates to the point where they would weigh on risk asset prices.

It’s no surprise that I see the greatest financial Bubble in history. I believe asset market inflation and Bubbles have been fueled by speculative leverage exceeding pre-2008 crisis levels. I see global financial and economic imbalances that have been exacerbated by six years of the most extreme monetary policy measures. By now, this type of analysis has been completely discredited. Few will care that I discern acute vulnerabilities.

Doug's latest Credit Bubble Bulletin didn't show up on the Internet site until late Friday evening---and I'd been checking for it for hours on end, as I knew it would fall directly into the absolute must read category, which it does.


Russian Sailors to Take Part in Mistral Warship Sea Trials in France

Russian sailors, who are currently training to crew Mistral-class helicopter carriers, built in France for the Russian Navy, will go to sea Saturday morning to take part in sea trials of the first ship ordered by Moscow, the Vladivostok, a source familiar with the situation told RIA Novosti.

"Yes, Vladivostok will indeed sail Saturday morning for tests. As far as I know, about 200 Russian sailors and the same number of French personnel will be on board," the source said.

This is the first time the ship goes to the sea since the two crews of Russian sailors, a total of 400 people, arrived in the French town of Saint-Nazaire in June.

This news story was posted on the RIA Novosti website at 10:53 p.m. Moscow time on their Friday evening---and it's the first contribution of the day from South African reader B.V.


Hollande pledges to expand France’s role in battle against IS

President François Hollande promised on a visit to Baghdad Friday to increase French military aid to Iraq to help the country in its battle against a jihadist insurgency by the Islamic State (IS) organisation.

"I came here to Baghdad to state France's availability in providing even more military assistance to Iraq," he told a press conference alongside Iraqi President Fuad Masum.

Hollande did not specify what form an increase in military aid would take, reserving the details until after a conference on Iraqi security set for September 15 in Paris.

“The goal (of the conference) is to coordinate aid, support and action for the unity of Iraq and against this terrorist group,” Hollande told journalists.

This story showed up on the website on Friday sometime---and I thank Orlando, Florida reader Dennis Mong for finding it for us.


1.8m people, 11km line: Catalonians stage their biggest independence rally

Europe saw one of the largest demonstrations in recent years: at least 1.8 million people formed an 11km red-yellow line to show their support for the upcoming independence referendum. A mosaic was made in the form of a 'V' for 'vote'.

At least 1.8 million Catalans, dressed in red and yellow, the colors of the Catalan flag, gathered on Gran Via and Avenida Diagonal, two of the main streets in Barcelona. Seen from the air, the rally formed a 'V' 11km long. According to the organizers, 'V' represented 'vote', 'victory' and 'will' (voluntat in Catalan).

The number of people participated in the rally – 1.8 million - even surpassed the number of population in Barcelona, which is about 1.6 million. There were more people than the whole population in Luxemburg, Lichtenstein, Monaco or Vatican.

This colourful photo essay put in an appearance on the Russia Today website at 11:55 a.m. Moscow time on their Friday morning---and it's the first contribution of the day from Roy Stephens.


Switzerland's bank fines not tax deductible, cabinet decides

Criminal fines imposed on corporations should not be tax deductible, but tax rebates could be claimed on illegally gained profits that a court has ordered a company to pay back, the Swiss government advised on Friday.

The cabinet was responding to a parliamentary motion to clarify the situation in light of a CHF2.6 billion ($2.8 billion) fine imposed by the United States on Credit Suisse bank earlier this year for the part it played in tax evasion offences.

The suspicion that the bank might try to claim tax expenses against the fine raised political hackles, prompting the motion from centre-left Social Democrat parliamentarian Susanne Leutenegger Oberholzer.

This article appeared on the Internet site at 5:47 p.m. Europe time yesterday afternoon---and it's the second offering of the day from South African reader B.V.


MH17 crash: Investigation focuses on '25 metal shards'

The investigation into the downing of Malaysia Airlines flight MH17 is searching for clues in 25 pieces of metal recovered from bodies and debris.

Dutch officials heading the inquiry say they want to establish whether the iron fragments could prove the theory that a ground-to-air missile struck the plane.

Flight MH17 came down over eastern Ukraine on 17 July, killing all 298 people aboard, mostly Dutch citizens.  The investigation has been hampered by continued fighting near the crash site.

Detectives are relying heavily on forensic samples taken from bodies and baggage, as well as satellite data, interviews with witnesses, computer reconstructions, online evidence and intercepted communications.

This story was posted on the Internet site at 11:18 a.m. EDT on Friday morning---and it's another contribution from reader B.V.


Uneasy calm in Ukraine's battle-scarred Donetsk

Since the start of a ceasefire last Friday, a fragile and uneasy calm has descended over eastern Ukraine's rebel stronghold of Donetsk, where the scars of five months of devastating clashes are plain for all to see.

But despite the pause in hostilities, the deep divisions between the separatists and the rest of Ukraine seem more entrenched than ever.

In the northern suburbs of the city, FRANCE 24's reporters encounter rebel soldiers guarding a bridge close to the front line – just a kilometre away, Ukrainian troops are dug in at what was once an international airport.

For the separatists, the ceasefire agreement changes little.

This news item appeared on the Internet site on Thursday---and once again I thank Roy Stephens for sending it.


‘There is no sincere will for peace in Ukraine from the main actors in the West’

Russia has been put into an impossible situation, meaning they are responsible not only for what has been done in Lugansk and Donetsk, but also for what has been done on the side of Kiev, political analyst Alexander Pavic told RT.

RT: Apparently, the truce in Ukraine is not enough for the EU to hold back on yet more sanctions. This somewhat contradicts what European leaders were saying earlier, doesn't it?

Alexander Pavic: The ceasefire was, first of all, the reflection of the very bad military situation for the regime in Kiev. They needed a breather to redirect, recompose their troops, to settle their fronts because they were losing badly, they were in danger of losing Mariupol. Unfortunately, the desire for peace was not honest, was not sincere. On the other hand, the chance to present peace should have been taken. We have had for the past few months one side, Russia, which has been bending over backwards to try to de-escalate the situation, we had several European countries who are trying as best as they could to also de-escalate [the situation] and raise the voice against sanctions. I’m talking about countries like Slovakia, even Italy, not official Germany so much but pretty important political forces inside Germany as well. Unfortunately, the voice from Washington and London was stronger, and as a result no ceasefire is going to be prominent until we have a change of direction, change of policy in the White House, in London and until Berlin decides it is working in the favor of Europe and not in favor of the EU, NATO and Anglo-American alliance.

As I've said before, dear reader, the U.S. and Britain want an armed conflict of some sort. This very interesting interview, which I consider worth reading, put in an appearance on the Russia Today website at 12:01 p.m. Moscow time on their Friday afternoon---and it's courtesy of Roy Stephens once again.


Russia, Ukraine, E.U. Reach Compromise on Kiev's European Integration

Russia, Ukraine and the European Union on Friday reached a crucial compromise on Kiev's free trade pact with the E.U. postponing its entry into force until the end of 2015, Russia's economic Development Minister Alexei Ulyukayev said.

"Until the date that we agreed upon - the end of 2015 - the Russian Federation pledges not to apply protective measures," Ulyukayev told reporters following the second round of trilateral ministerial talks on Ukraine-E.U. association agreement.

"We will continue the discussion of the issue that concerns us the most - what form [of a solution] we could find to alleviate our worries," Ulyukayev said.

"So far, we have agreed to continue dialogue for the next 15 months, we will present our arguments while our colleagues will offer theirs," the minister added.

This brief news item appeared on the RIA Novosti website at 8:41 p.m. Moscow time [12:41 p.m. EDT] on their Friday evening---and the stories from Roy Stephens just keep on coming.


West pushes crippling sanctions on Russia's oil industry despite Ukraine ceasefire

Europe and the U.S. are to press ahead with fresh economic sanctions against Russia despite the ceasefire in eastern Ukraine, aiming to choke off credit and technology vitally needed to arrest the decline of Russia’s oil industry.

The E.U. is to ban loans to five state-owned banks and three energy companies from Saturday, targeting new oil ventures the Arctic and the Siberia shale basin rather than gas operations.

U.S. President Barack Obama said his country will “deepen and broaden” its own array of measures. These are aimed directly at the Russian oil industry, threatening to paralyse Exxon’s $3.2bn joint venture in the Arctic with Rosneft. The sanctions may force BP to shelve its plans for shale development with Rosneft in the Volga Urals.

The rouble fell to a record low of 37.53 against the dollar. The MICEX index of stocks dipped 1.3pc yet it remains far above levels seen earlier this year, suggesting investors are starting to treat each wave of sanctions as political theatre.

This commentary by Ambrose Evans-Pritchard showed up on the Internet site at 9:42 p.m. BST on their Thursday evening---and it's another offering from Roy Stephens.


U.S. intensifies sanctions on Russia over Ukraine

The United States hit Russia's largest bank, a major arms maker and arctic, deep water and shale exploration by its biggest oil companies with new sanctions on Friday to punish Moscow for its intervention in Ukraine.

The sanctions, coordinated with similar European Union steps, were triggered by what the West sees as Moscow's recent effort to destabilize eastern Ukraine by backing pro-Russian separatists with troops, heavy arms and cross-border shelling.. They are the latest economic penalties imposed by the West since Russia annexed Crimea from Ukraine in March.

The sanctions target companies including Sberbank, Russia's largest bank by assets, and Rostec, a conglomerate that makes everything from Kalashnikovs to cars, by limiting their ability to access the U.S. debt markets.

They also bar U.S. companies from selling goods or services to five Russian energy companies to conduct deep water, Arctic offshore and shale projects. The Russian firms affected are Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft.

This Reuters article, filed from Washington, appeared on their Internet site at 3:32 p.m. EDT yesterday afternoon---and it's another contribution from Dennis Mong.


Russia Threatens Lawsuits With WTO Over New Western Sanctions

New Western sanctions against Russia give Moscow additional incentives to appeal them in the World Trade Organization as they contradict the WTO regulations, Economic Development Minister Alexei Ulyukayev said Friday.

“I believe that even the previous round of sanctions was the reason enough to appeal with the WTO. And we will certainly do it,” Ulyukayev told reporters in Brussels.

“We will not rush the issue and prepare our appeals in the most argumentative and well-warranted manner,” the minister said.

This story appeared on the RIA Novosti website at 9:30 p.m. Moscow time on their Friday evening, which was 1:30 p.m. EDT.  It's courtesy of Roy Stephens.


Putin: West Makes Use of Ukrainian Crisis to Destabilize International Situation

Russian President Vladimir Putin said Friday that the West uses the crisis in Ukraine to destabilize the international situation, while the country itself is of no interest to anyone.

"I have a conspiracy theory that Ukraine itself is of no interest to anyone, but simply being used as a tool to destabilize international relations," Putin said after the Shanghai Cooperation Organization (SCO) summit.

"Ukraine is used as a tool, as a hostage to the desire of some participants in the international dialogue, to, say revive NATO. And not only as a military organization, but also as one of the key instruments of US foreign policy," the Russian leader said.

This is another story from the RIA Novosti website.  This one put in an appearance there at 8:36 p.m. Moscow time on Friday evening.  It's also courtesy of Roy Stephens.


Russia Containment 2.0---with Stephen Cohen and John Mearshiemer

What does Washington's "containment" policy mean? What threats does it pose? Will it work against today's Russia? And does this mean Washington has declared a new Cold War? CrossTalking with Stephen Cohen and John Mearsheimer.

This excellent 27:42 minute video interview appeared on the Russia Today website in late April---and it's now up on  If you're a student of the New Great Game, this is definitely worth watching.  I thank reader Larry Galearis for bringing it to our attention.


Sergey Lavrov: Throwing Russia off balance is ultimate aim

In an interview for the ITAR-TASS project 'Top Officials'---Foreign Minister Sergey Lavrov said that Washington and some European countries had made a decision to isolate Russia long ago

Over the more than ten years in office as Russia’s foreign minister Sergey V. Lavrov has appeared at thousands of news conferences and granted hundreds of interviews. Minutes before the interview that follows (which lasted for more than two hours) he first loosened and took off his necktie. Then he unbuttoned the top button of his shirt, but only the top one.

On the feeling of despair and the boiling point

- Sergey Viktorovich: you’ve had a really hot time for the past six months.

- And it’s not all over yet. Generally speaking, there has been no calm in foreign politics for a long time. But in summer I did have some time for recreation. In Russia, mind you.

- Don’t you get despaired due to the lack of calmness in foreign affairs?

- No, never ever. That’s not the type of feeling I may have deep down in my heart. We cannot afford to get desperate. We must keep doing our job right.

This very long one-on-one interview with Russian Foreign Minister Sergey Lavrov is also a must read for any serious student of the New Great Game.  It was posted on the ITAR-TASS Internet site at 1:11 p.m. Moscow time on their Thursday afternoon---and it's courtesy of reader B.V.  It had to wait for today's column for length reasons.


U.S. opposes Iran's presence at French-hosted conference on Iraq

U.S. Secretary of State John Kerry said on Friday it was "not appropriate" for Iran to join talks on confronting Islamic State militants, as he appeared to play down how fast countries can commit to force or other steps in an emerging coalition.

Kerry met Turkish leaders to try to secure backing for U.S.-led action against Islamic State militants, but Ankara’s reluctance to play a front line role highlighted the difficulty of building a willing coalition for a complex military campaign in the heart of the Middle East.

As he tours the region to gather support for President Barack Obama’s plan to strike both sides of the Syrian-Iraqi frontier to defeat Islamic State Sunni fighters, Kerry said Shi’ite Iran should have no role in talks on how to go about it.

This article was posted on the Internet site early this morning Europe time---and I thank Roy Stephens for sliding it into my in-box just after midnight Denver time this morning.


Robert Fisk on Isis campaign: Bingo! Here’s another force of evil to be ‘vanquished’

Resurrection, reinvention and linguistics. Barack Obama did the lot. And now he’s taking America to war in Syria as well as Iraq. Oh yes, and he’s going to defeat Isis, its “barbarism”, “genocide”, its “warped ideology” – until the bad guys are “vanquished from the earth”. What happened to George W. Bush?

But let’s go through this with a linguistic comb. First, Obama is going to resurrect the Sunni “Awakening Council” militias – a creature invented by a certain General David Petraeus – who were paid to fight al-Qaeda by the Americans during the U.S. occupation of Iraq, but who then got blasted by al-Qaeda and betrayed by the Shia-dominated Iraqi government. Obama has even invented a new name for these militias: he called them “National Guard Units” who will “help Sunni communities secure their own freedom from Isil”. National Guard indeed!

Then there’s the reinvention of the “moderate” Syrian opposition which was once called the Free Syrian Army – a force of deserters corrupted and betrayed by both the West and its Islamic allies – and which no longer exists. This ghost army is now going to be called the “Syrian National Coalition” and be trained – of all places – in Saudi Arabia, whose citizens have given zillions of dollars to al-Qaeda in Iraq, Isis, Isil, IS (you decide on the acronym), Jabhat al-Nusra and sundry other bad guys whom Obama now wants to “vanquish from the earth”.

Fisk carves Obama a new one in this commentary that appeared on the Internet site on Thursday---and it's another contribution from reader B.V.


Global banks retreat as the U.S. and China tighten in lockstep

The world financial system is at an inflection point as the US and China both switch off monetary stimulus, a form of synchronized tightening by "G2" superpowers.

Bank of America has warned clients that the glory days of "maximum liquidity" we have enjoyed in the post-Lehman era are coming to an end, with sweeping implications for asset markets across the world.

The yield on 10-year US Treasuries - the benchmark price of global money - has already jumped 20 basis points to 2.54pc since mid-August as it becomes clear that the US economy has survived its Winter wobble and is moving into an incipient boom. Growth reached 4.2pc in the second quarter, with the ISM manufacturing gauge near 30-year peaks.

Bank of America expects yields to jump to 3.1pc this year, and 3.75pc by the end of 2015 as the Federal Reserve raises interest rates in earnest.

This commentary by Ambrose Evans-Pritchard showed up on the Internet site at 8:19 p.m. BST on their Friday evening---and it's the final contribution of the day from Roy Stephens, for which I thank him.  [Note: This should be read in the context of what Doug Noland had to say in his Credit Bubble Bulletin posted further up in the Critical Reads section]


Three King World News Blogs

1. Paul Craig Roberts: "World's Most Powerful Banks to Loot U.S."  2. Ronald-Peter Stoferle: "World to Enter Second Terrifying 2008-Style Global Meltdown"  3. John Mauldin: "This Great Danger May Trigger a Worldwide Crash

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]


Hugo Salinas Price: Fiat money and independence for Scotland

Fiat currency is a cause of national separatism, currency wars, and social division between rich and poor, Hugo Salinas Price of the Mexican Civic Association for Silver writes this week in commentary headlined "Fiat Money and Independence for Scotland," posted at the association's Internet site,

I found this commentary posted on the Internet site---and I hope the link works, as I always have problems getting this website to load up on my computer.  But I managed to get it to work this time---and it's certainly worth reading.


Gold price reform to focus on improved transparency, governance controls

Instead of scrapping the century-old London Gold Fix altogether, gold industry role-players are calling for the modernisation of the method used to determine global gold price benchmarks, which is currently the subject of ‘intense’ debate, but not regarded as fundamentally broken.

This comes after increased scrutiny by European and U.S. regulators of gold and silver fixes, along with other commodity benchmarks, regarding the processes and methods used to set commodity prices.

Incidents include the London Interbank Offered Rate, or Libor, case of widespread interest rate manipulation in 2012 and, more recently, Barclays, the group that controls South Africa’s Absa Bank, being fined £26-million by the U.K.’s Financial Conduct Authority in May for failures in internal controls that enabled a gold options trader to manipulate the setting of gold prices.

Industry players note that an optimal gold fix reform will require strengthening through transparency and governance improvements, among other improvement options.

As you already know, dear reader, the London p.m. gold 'fix' is only part of the problem.  It's the negative bias in London trading [since January 1, 1975] that is the overlying concern.  Pile on top of that the criminal CME Group, aided and abetted by the CFTC---and the problems of the London fixes, gold or silver, fade into insignificance.  I thank South African reader B.V. for his final contribution to today's column---and if you decide to read this commentary that was posted on the Internet site yesterday, I'd do it for entertainment purposes only.


Koos Jansen: India's gold imports for June were highest in 12 months

Gold researcher and GATA consultant Koos Jansen reports that India's official gold imports for June were the highest in 12 months, which seems to contrast strangely with the Reuters report that India may be falling out of love with gold.

I found this story in a GATA release yesterday---and I thank Chris Powell for wordsmithing the above paragraph of introduction.  It's certainly worth your time.


7 Times People Found Money in Bizarre Places

A pot of gold doesn't always sit at the end of a rainbow.

Instead, it can sit quietly in backyards, bathroom walls and even right beneath your feet. Some people set out to hunt for treasure, while others somehow manage to accidentally stumble onto valuable items.

We took a closer look at those who found fortunes unexpectedly, and discovered that many strange places have been home to some of the world's most expensive treasures.

This interesting compilation appeared on the Internet site a couple of days ago---and I thank Elliot Simon for today's last story. 



¤ The Funnies

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¤ The Wrap

Looking ahead, given the extremely bullish COT set up at hand, it is not unreasonable to contemplate the nature of the next rally, even as the last few price slices to the downside are observed. Specifically, will the collusive commercials rush to aggressively sell to the technical funds who will, most assuredly, be buying aggressively as and when prices climb above the moving averages. You don’t need an IBM 360 to figure out that the technical funds will buy on higher prices, just what will be the commercials’ reaction.

Many would contend that the reasonable bet would be that, of course, the commercials will sell as much as necessary to cap prices on the next rally because that has almost always been the case. While I can’t argue that might occur yet again, I can argue that commercial price capping will end someday and with it the silver manipulation itself. That day is unknown to me but its coming is certainty why I hold silver (and buy call options). - Silver analyst Ted Butler: 10 September 2014

Today's pop 'blast from the past' dates from 1977---and neither the song nor the group that performs it, needs any introduction.  I've posted this before, but it's been a couple of years.  The link is here.

Today's classical 'blast from the past' dates from baroque era in the mid-18th century.  It's J.S. Bach's Concerto for Violin and Oboe in C minor, BWV 1060R which has a very interesting history, as it was a reconstruction from Bach's Concerto for two harpsichords.  This video was recorded at the Vilnius National Philharmonic Hall in Lithuania in December of 2010.  The link is here---and it's a good a recording of this work as you're likely to hear.  The soloists are first rate---and not hard on the eyes, either.

Not unexpectedly, it was another salami-slicing day in all four of the precious metals, as the engineered price declines continued.  What I found interesting about them was the fact that they occurred at different times during the Friday session.  Normally they occur all at the same time, or close to the same time, but not yesterday.

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

Gold and silver prices are now lower than they were at the lows back in late May, early June of this year---and platinum hasn't been this oversold since mid-May of 2012.  If forced to bet ten bucks, I'd say we saw the lows for this move down yesterday---and if not, they aren't far off in time or in price.

Where we go from here was nicely summed up in Ted Butler's quote further up, so I won't bother reinventing the wheel by trying to say the same thing in my own words.

I mentioned in yesterday's column that "there's the possibility that the price management scheme may blow up before Tuesday's cut-off, as this sell-off appears to have some sort of urgency attached to it."

And if it does blow up, it will certainly be centered around the Comex futures market in silver.

Along with the reasons I gave in The Wrap yesterday---the frantic in/out movement in silver at the Comex for the last three plus years, the huge increase in SLV deposits since June, despite the negative price action---and one I forgot to mention was the non-technical fund long holder sitting in the bushes in the Managed Money category of the Disaggregated COT Report.  If they added to their long position during the last reporting week, it wasn't much--and was disguised by other traders pitching their long positions.

The last thing I have my eye on is the lead story in my Tuesday column which was headlined "CME Group Admits Its Exchanges Have Been Allowing Manipulative Trading Practices".  This Zero Hedge piece mentions [and posts it in its entirety] a letter from the CME Group to the CFTC dated August 28, 2014.  In that letter it states that "starting September 15, 2014 the CME will no longer tolerate "Disruptive market practices."---and you can read the complete list in the ZH article, which I urge you to do, even if you've already read it once.

Anyway, March 15 is Monday---and we should find out in reasonably short order if this "new rule 575" makes any difference.  I'm expecting that it will, but it's impossible to tell.

Along with that situation, I'm completely at ease with what Doug Noland said in his weekly Credit Bubble Bulletin which, if you haven't read, you can redeem yourself now by clicking here.

The salient paragraph reads "It’s no surprise that I see the greatest financial Bubble in history. I believe asset market inflation and Bubbles have been fueled by speculative leverage exceeding pre-2008 crisis levels. I see global financial and economic imbalances that have been exacerbated by six years of the most extreme monetary policy measures. By now, this type of analysis has been completely discredited. Few will care that I discern acute vulnerabilities."

Amen to that!

The world's economic, financial and monetary system are now totally out of control---and I'm sure the Jim Rickards is looking around for snowflakes, as the avalanche he predicted is most certainly at hand.

I await the Sunday night open in New York with more than the usual amount of interest, along with the remainder of the Monday trading session that follows.

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

But before heading off to bed, I'd like to remind you one final time that this coming Monday is the last day you can sign up for that special discount for Casey OnePass and still save $1,749 on the full subscription package.

As you may already know, with the Casey OnePass, you get ALL of Casey’s newsletters (no CIA or CEC alert services) at a significant saving of $1,749 per year.  But more importantly, Casey Research has got some good opportunities across all sectors---and what better way to keep track of them, then to sign up for a service that includes them all?

You can find out all you need to know by clicking here---and it costs nothing to have a look.

Enjoy what's left of your weekend---and I'll see you here on Tuesday.