Gold & Silver Daily
"It's been a struggle for the President's Working Group on Financial Markets"

¤ Yesterday In Gold & Silver

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

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

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

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

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

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

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

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

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

The rallies in gold and silver ended at the point where the low tick in the dollar index was set.

The gold stocks opened in positive territory---and rallied to their highs within fifteen minutes.  But starting shortly after 11 a.m. EDT, they began to sell off, hitting their low ticks in slightly negative territory shortly after 2 p.m. in New York.  From there they rallied back into positive territory---and the HUI closed up 0.38 percent.

The silver equities followed a similar price pattern, except their rally after their 2 p.m. low ticks made it back to only unchanged, as Nick Laird's Intraday Silver Sentiment Index closed down a tiny 0.08 percent.

Nick Laird advised us that month-to-date the HUI is up 10.72 percent---and the Silver Sentiment Index is up 6.39 percent.  Year-to-date the HUI is up 7.73 percent---and the Silver Sentiment Index is up 2.47 percent.  For the latest week, the HUI was up 3.23 percent---and Silver Sentiment Index was up 0.51 percent.

The CME Daily Delivery Report showed that 624 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  The only short issuer was JPMorgan out of its client account.  The two big stoppers were Canada's Scotiabank with 314 contracts---and JPMorgan out of its in-house [proprietary] trading account with 299 contracts, screwing over their own clients once again.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest for April dropped by 1 contract---and now stands at 1,826 contracts still open, minus the 624 posted above.  Silver's April o.i. was unchanged at 172 contracts.

There was a deposit in GLD yesterday.  This time an authorized participant added 95,943 troy ounces.  And as of 9:55 p.m. EDT yesterday evening, there were no reported changes in SLV.

And for the third day in a row, there was no sales report from the U.S. Mint.

Over at the COMEX-approved depositories, there was 50,020 troy ounces of gold reported received at HSBC USA---and 8,134 troy ounces shipped out on Thursday.  The receipt was, almost to the ounce, the amount of gold that was shipped out of the Scotiabank depository on Wednesday.  The link to that activity is here.

Another day---and another big silver deposit into the vaults over at JPMorgan on Thursday.  This time they reported receiving 1,183,777 troy ounces---and 63,617 troy ounces were shipped out, mostly from Canada's Scotiabank.  The link to that action is here.

Just for fun here, once again, is Nick's updated chart showing JPMorgan's silver inventory at its New York depository as of the close of trading on Thursday---now up to 55.69 million troy ounces.  Is there more to come?  Beats me, but Ted says that they've already taken in much more silver than the 7.5 million they contacted for delivery in March---and I know that he'll have lots to say about it in his weekly review later today.

At the Gold Kilo Stocks COMEX-approved depository in Hong Kong, Brink's, Inc. reported receiving 55 kilobars---and shipped out 1,252 kilobars.  The link to that action, in troy ounces, is here.

The Commitment of Traders Report for positions held a the close of COMEX trading on Tuesday was pretty much what I was expecting.

In silver, the Commercial net short position declined by a healthy 6,573 contracts.  This brings the Commercial net short position down to 43,865 contracts, or 219.3 million troy ounces.

The 'Big 4' traders covered 1,200 contracts---the '5 through 8' traders actually added 500 contracts to their short position---and the small Commercial trader, Ted's raptors, added about 5,900 contracts to their long positions.  Ted said that JPMorgan's short-side corner in the COMEX silver market is down to about 17,000 contracts.

Under the hood in the Managed Money category, the picture was even better, as they sold 2,958 long contacts---and went short an additional 5,676 short contracts.

In gold, the Commercial net short position declined by 4,696 contracts, or 469,600 troy ounces.  The Big 4 traders covered 400 short contracts the '5 through 8' traders covered 2,300 short contracts---and the raptors added about 2,000 contracts to their long positions.

Under the hood in the Managed Money category of the Disaggregated COT Report, the technical funds sold 2,308 long contracts---and added 5,318 short contracts---so the numbers under the hood, like in silver, were much better than headline number in the Legacy COT Report.

Overall, gold and silver can be described as neutral for the most part from a COT perspective.  True, with the improvements this past reporting week, the positions are slightly more bullish,  however it appears that "da boyz"have gold and silver prices trending lower---and if they and their HFT partners really put their minds to it, they could peel another 60 bucks off the gold price---and a buck off silver---to get the technical funds in the Managed Money category back to the wildly bullish configuration we were in about a month ago.

But can they, or will they?  Beats me, so we wait some more.

Nick Laird was kind enough to provide the withdrawals from the Shanghai Gold Exchange for the week ending Friday, April 10.   I was hoping and expecting more, but the numbers are what they are.  They reported that 34.527 tonnes were taken out---and here is his most excellent chart.

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


¤ Critical Reads

Core Inflation Jumps Most Since October Due to Rent, Healthcare Costs

Following February's big bounce back MoM, Consumer Prices in March rose 0.2% MoM (less than the expected 0.3% rise) but it is YoY that is the great news for Americans. CPI fell 0.1% YoY in March (below expectations of unchanged) which means Consumer Prices haven't risen YoY in 3 months. However, while this clear disinflationary signal is persistent, Core CPI continued to rise 1.8% from last year  (above the 1.7% consensus) driven by big jumps in the cost of shelter (thank you Fed) and healthcare (thank you Govt); which should send shivers through the risk-bulls as The Fed may be forced to pull rate hikes forward.

On an annual basis, there is now a huge divergence between Core and Headline CPI, mostly as a result of dropping energy prices impacting the headline data.

This longish commentary, with lots of charts and graphs, was posted on the Zero Hedge website at 8:43 a.m. EDT yesterday morning---and today's first offering is from Dan Lazicki.


Stocks Slammed - Dow Tumbles 350 Points Into Red Year-to-Date

This tiny Zero Hedge article from yesterday consists of three charts---and although the Dow closed off its low tick, the fact that the the President's Working Group didn't show up to save the day on a Friday is a bad omen for next week.  But maybe they were there early enough to prevent a crash yesterday.  I guess we'll never know.

This story appeared on their website at 10:09 a.m. EDT on Friday morning---and it's the second offering in a row from Dan L.


Well That's Never Happened Before - Exhibit 1

We have never, ever, seen the U.S. equity market so disconnected from underlying macro fundamentals.

As the chart shows, the rising stock market is shockingly divergent from the U.S. Macro picture (the greatest divergence ever). This has happened before (in 2006/7) but on a lesser scale, and did not end well.

This tiny story with a must view embedded chart, put in an appearance on the Zero Hedge website at 3:37 p.m. EDT yesterday afternoon---and it's definitely worth a look.  That's three in a row from Dan Lazicki.


"We're All Frogs in Boiling Water" Santelli Says After Lacy Hunt Warns "This is Far From Over"

Global debt has expanded by $35 trillion since the credit crisis and as Lacy Hunt exclaims, "that's a net negative, debt is an increase in current consumption in exchange for a decline in future spending and we are not going to solve this problem by taking on more and more debt." Santelli notes that debt will actually keep growth "squashed down" and points out the low rates in Europe questioning the ability of The ECB's actions to save the economy which Hunt confirms as "longer-term rates are excellent economic indicators" and that is not a good sign for Europe. 

"This process is far from over," Hunt concludes, "rates will move irregularly lower and will remain depressed for several years."

Santelli sums up perfectly, "we're all frogs in boiling water," as we await the consequences of central planning.

This 3:29 minute CNBC video clip from 9 a.m. Friday morning is embedded in this Zero Hedge story from 4:35 p.m. EDT yesterday afternoon---and it's another news item courtesy of Dan Lazicki.  It's worth your while.


UBS’s Weber, BlackRock’s Fink on liquidity crunch debate

This 4:22 minute video video interview with Maria Bartiromo hosting Axel Weber and Larry Fink was posted on the Internet site at 4:22 a.m. EDT yesterday morning---and the stories from Dan just keep on coming.  There's also more from Larry Fink and Maria linked here.  This CNBC video clip runs for 8:28 minutes---and Dan sent that our way as well.


Delusional Keynesians Pushing Us Over a Cliff -- Mike Maloney

This 17:03 minute video presentation from Mike was posted on the Internet site back on Tuesday---and for length reason had to wait for today's column.  I thank Dan Rubock for bringing it to our attention.


Why Schlumberger Will Fire 11,000

The announcement was simple and came as a part of Schlumberger Ltd.’s terrible first-quarter earnings announcement. The carnage of layoffs continues across the oil industry due to low crude prices.

Schlumberger chairman and CEO Paal Kibsgaard said: "In spite of the detailed preparations we made in the fourth quarter, the abruptness of the fall in activity, particularly in North America, required us to take additional actions during the quarter. These included the difficult decision to make a further reduction in our workforce of 11,000 employees, leading to a total reduction of about 15% compared to the peak of the third quarter of 2014."

This very interesting news item appeared on the Internet site at 6:32 a.m. EDT on Friday morning---and I thank Orlando, Florida reader Dennis Mong for sending it our way.  There was also a UPI article about this---and it's headlined "Schlumberger to lay off 11,000"---and I thank Roy Stephens for this one.


Jim Rickards: Oil — The good, the bad and the ugly

Everyday Americans have good reason to celebrate the recent collapse in oil prices. This is the fastest, steepest decline in oil prices since the mid-1980s. Results are already showing up at the gas pump. The price of regular gasoline has collapsed from almost $4.00 a gallon to $1.99 a gallon in some places. For a driver who uses 50 gallons per week, that’s an extra $100 per week in your pocket; enough to buy a new dress or take your family out to a nice dinner. If that new low price sticks, the savings keep coming and it adds up to a $5,000 per year raise. Best of all, the government can’t tax the $5,000. If you got a pay raise, they would tax it, but if the cost of things you buy is lower they can’t tax the savings. What’s not to like? That’s the good news.

Economists assume this extra money in your pocket will immediately be spent. That extra spending might put some money in someone else’s pocket. For example, if you spend your $100 weekly savings from gasoline going out to dinner, you might tip the waiter $15, at which point the waiter has an extra $15, (maybe more if your neighbors are doing the same thing) and he can spend more, and so on. This is the famous “multiplier” effect at work, where an extra amount of spending leads to more spending by the recipients so that the total economic growth, what economists call “aggregate demand,” is higher than the initial spending. More good news.

At least that’s what you’ll hear on television.

When you look beneath the surface, you’ll see some things that are not so good are maybe even bad for your portfolio.

This short essay from Jim Rickards was posted on the Internet site yesterday sometime---and it's the first contribution of the day from Harold Jacobsen.


Unsound Banking: Why Most of the World’s Banks Are Headed for Collapse

You’re likely thinking that a discussion of “sound banking” will be a bit boring. Well, banking should be boring. And we’re sure officials at central banks all over the world today—many of whom have trouble sleeping—wish it were.

This brief article will explain why the world’s banking system is unsound, and what differentiates a sound from an unsound bank. I suspect not one person in 1,000 actually understands the difference. As a result, the world’s economy is now based upon unsound banks dealing in unsound currencies. Both have degenerated considerably from their origins.

Modern banking emerged from the goldsmithing trade of the Middle Ages. Being a goldsmith required a working inventory of precious metal, and managing that inventory profitably required expertise in buying and selling metal and storing it securely. Those capacities segued easily into the business of lending and borrowing gold, which is to say the business of lending and borrowing money.

Most people today are only dimly aware that until the early 1930s, gold coins were used in everyday commerce by the general public. In addition, gold backed most national currencies at a fixed rate of convertibility. Banks were just another business—nothing special. They were distinguished from other enterprises only by the fact they stored, lent, and borrowed gold coins, not as a sideline but as a primary business. Bankers had become goldsmiths without the hammers.

This commentary by Doug Casey showed up on the Internet site yesterday---and I thank senior editor Nick Giambruno for bringing it to my attention, and now to yours.


Doug Noland: Horrible Risk Versus Reward

In an interview, Mr. Bernanke said he was sensitive to the public’s anxieties about the ‘revolving door’ between Wall Street and Washington and chose to go to Citadel, in part, because it ‘is not regulated by the Federal Reserve and I won’t be doing lobbying of any sort.’ He added that he had been recruited by banks but declined their offers. ‘I wanted to avoid the appearance of a conflict of interest,’ he said. ‘I ruled out any firm that was regulated by the Federal Reserve.’”

I’m reminded of Willie Sutton’s response to why he robbed banks: “Because that’s where the money is.” I could only chuckle at the New York Magazine headline: “Helicopter Ben Makes it Rain – for Himself.” It’s absolutely laughable that the former Fed chair suggests part of his decision for hooking up with a hedge fund was his sensitivity to public anxieties about the “revolving door” between Wall Street and Washington.

I, at least, would rather see Bernanke working with a traditional regulated financial firm, although his compensation would surely be much less. Especially in this Bubble backdrop with the global leveraged speculating community playing such an integral role, it just doesn’t look good. In an era where public confidence in the Federal Reserve is so thin and vulnerable, why couldn’t Bernanke have just stuck with his post-Fed career of writing, teaching and a few lucrative dinner engagements? After all these years, I still miss Chairman Volcker.

Here's Doug's weekly Credit Bubble Bulletin from late yesterday evening---and I had to dig up myself, as reader U.D. was out wining and dining his girlfriend.


Canada’s Political Mainstream Backs War in Ukraine

Canadians will go to the polls next October in the first national election since the Conservative Party won a majority government in 2011. There is intense concern among progressive people in the country about the prospects of the Conservatives winning another term in office.

The government of Prime Minister Stephen Harper is moving further and further to the right. It has aligned itself tightly with U.S. foreign policy, including being ‘holier than thou’ in its unconditional support of Israel. It joined the U.S.-led air war in Iraq six months ago and now it is joining the U.S. in expanding that to Syria. It has cemented Canada’s role as a leading climate vandal in the world. It has attacked civil and social rights across the board and is now deepening that attack with the proposed, ‘police-state Canada’ Bill C-51.

This leaves many Canadians favorable to the idea of an electoral and governing alliance between the two, large opposition parties in Parliament—the Liberal and New Democratic parties—in order to defeat the Conservatives. NDP leader Tom Mulcair says he is open to a governing coalition with the Liberals if neither party wins an electoral majority.

But on the increasingly dangerous issue in world politics—the war in eastern Ukraine and accompanying military threats and expansion of NATO in eastern Europe—there is an astonishing unanimity in the Canadian political and media establishment. NATO is embarked on a drive to weaken Russia, with all the risk and folly that entails—including a nuclear danger. The people and territory of Ukraine are being used as war proxies to get at Russia. Yet, there is nary a peep of disagreement in the Parliament in Ottawa.

This is an absolute must read for all Canadians---and once again I apologize profusely---and on bended knee---for the disgraceful and unforgivable behaviour of Prime Minister Stephen Harper et al in Ottawa.  My grandfather, who fought in France and Belgium in WWI, would be horrified if he could see how things have turned out.  This is a story that, for obvious reasons, had to wait for my Saturday column---and I thank Roy Stephens for sharing it with us.  It was posted on the Internet site on March 31.


IMF tells regulators to brace for global 'liquidity shock'

An illusion of liquidity has beguiled financial markets across the world and spawned some of the worst excesses seen on Wall Street in modern times, the International Monetary Fund has warned.

Investors are borrowing money to buy shares on the U.S. stock market at a torrid pace and are resorting to the same sorts of financial engineering that preceded the last two financial crises.

"Margin debt as a percentage of market capitalisation remains higher than it was during the late-1990s stock market bubble. The increasing use of margin debt is occurring in an environment of declining liquidity," said the IMF in its Global Financial Stability Report.

"Lower market liquidity and higher market leverage in the U.S. system increase the risk of minor shocks being propagated and amplified into sharp price corrections," it said.

This must read Ambrose Evans-Pritchard commentary showed up on the Internet site on Wednesday afternoon BST---and I thank reader U.D. for passing it around last night.


Greek 'day of reckoning' shakes stock markets

Fear that Greece could default on its debt and abandon the euro rattled global financial markets Friday.

News that negotiations between Greece and its international lenders are making little progress sent European stock markets down sharply, and the selling spread across the Atlantic. By the close of U.S. trading, stocks across industries were lower, with four of five stocks down. Investors shifted money into German government bonds, a perceived haven in troubled times.

In the U.S., disappointing first-quarter financial results from several big companies fed the selling. After American Express reported revenue that fell short of expectations, investors drove down its stock more than 4 percent.

"The day of reckoning" for Greece is fast approaching, said Uri Landesman, president of investment fund Platinum Partners. "People thought everyone would work it out, but if no one caves, there won't be a deal."

This AP story, filed from New York, appeared on the Internet site yesterday afternoon EDT---and I thank Dennis Mong for digging it up for us.


Looming Greek 'crunch' threatens fresh global crisis, warns Osborne

George Osborne has warned that Greece's battle with Europe's creditor powers is nearing a "crunch" point and threatens to detonate a fresh global crisis if mishandled over the next days and weeks.

The Chancellor said the escalating crisis in Greece is now the biggest threat to the world economy and has become a haunting theme for finance ministers and central bankers meeting at the International Monetary Fund in Washington this week.

"The mood is notably more gloomy than at the last international gathering, and it is now clear to me that a misstep or a miscalculation by either side could easily return European economies to the kind of perilous situation we saw three or four years ago," he said.

"The crunch appears to be coming in May, and it would be a mistake to think that the UK would be immune. Of course, it would be the very worst moment for there to be any confusion about the direction of British of economic policy, or for a change of direction. We need resilience for moments like this," he said.

This is the second Ambrose Evans-Pritchard offering in today's column.  This one showed up on The Telegraph's website at 7:00 p.m. BST in London yesterday evening---and it's worth reading as well.  I thank Roy Stephens for sharing it with us.


John Batchelor interviews Stephen F. Cohen on the current situation in the Ukraine

It would appear as if the Minsk2 agreement is failing all along the Donbass frontier at numerous locations with hundreds of incidents of shelling by heavy artillery, tanks and rockets.  These incidents have been progressively increasing for a week.  

It would be no coincidence that the rhetoric against Minsk2 and the increasing numbers of shelling transgressions by Kiev forces have triggered yet another geopolitical change that has grave implications for peace. This is the Russian sale of the S 300 anti aircraft missile system to Iran. All part of the deteriorating geopolitical position between East and West. The S-300 system, incidentally, is a very efficient one that may prove rather impervious to attacking aircraft - for use around nuclear reactors, for instance. This weapon system sale has been on hold as Russia has tried to find a diplomatic solution to the Iran/USA stalemate. And it follows that Moscow is no longer confident in finding any diplomatic solutions with Washington.

Cohen very accurately has pointed out that Russia has changed its economic and treaty relationships with other countries profoundly due to its standoff with Washington and the E.U., while Washington has done little and the E.U. has suffered greatly. The latest change is with Greece, and it remains to be seen if this will further weaken both NATO and the E.U. On the other hand, Canada has sent a military contingent (perhaps only medical training personal).

This 39:45 minute audio interview was posted on the Internet site on Tuesday---and I thank Larry Galearis for sending it our way.  It's definitely worth your while if you have the time---and the interest, which you should.


Airlines Slash Routes to Moscow in Latest Sign of Russia's Growing Isolation

In 2012, British discount airline EasyJet beat Virgin Atlantic Airways in a fierce competition for the rights to fly from London's Gatwick to Moscow's Domodedovo airport, a route that became available when its former operator was swallowed up in a merger. British aviation regulators gave the nod to EasyJet, which hailed the decision as a milestone in its international development.

Now, EasyJet has scaled back its London-Moscow service, from two daily flights to only one in each direction. The move, which took effect in late January, "was in response to the reduction in demand to and from Russia in recent months," an airline spokeswoman says.

The British discounter is one of many airlines curtailing flights to Russia and shelving planned expansion there, as the number of Russians vacationing abroad has plummeted and fewer foreign businesspeople and tourists are visiting the country.

This very interesting story, with the usual negative propaganda twist, appeared on the Bloomberg website at 6:57 a.m. Denver time on Friday morning---and I thank reader "G Roberts" for sending it along.


France sticks to its guns on shelved Mistral deliveries to Russia

French Foreign Minister Laurent Fabius on Thursday said France’s decision to suspend the delivery of two Mistral warships to Russia had not changed as the 1.2 billion-euro defence contract appeared to steadily sink.

“The issue has not evolved since the last announcements by the president,” Fabius told FRANCE 24 in referring to François Hollande’s decision in November to keep two Mistral-class helicopter carriers moored at the Saint Nazaire shipyard in western France indefinitely.

“We are at a stage where the decision [to fulfill the contract with Russia] is suspended,” said Fabius at a press conference in Paris.

This news item, which is certainly worth reading, put in an appearance on the Internet site on Thursday---and once again I thank Roy Stephens for sharing it with us.


Watch out for yuan/SDR topic at IMF meeting -- Jim Rickards

Jim Rickards, chief global strategist at West Shore Funds, explains why the topic about including the yuan in SDR's basket could steal the limelight at upcoming IMF and World Bank meetings.

This 4:24 minute interview was conducted by Bernie Lo out of CNBC Hong Kong---and was posted on their Internet site on Thursday evening EDT.  It's worth watching.  I thank Harold Jacobsen for his second contribution of the day.


Chinese Stocks Are Still Crashing

While the Chinese are long to bed, futures continue to trade on their exuberant stock market... and it's going south in a hurry. As we noted earlier, the catalyst appears to be a regulatory decision to increase the number of 'shortable' securities (and follow-through from PBOC's day prior demands of brokers to monitor margin trading). Both of these actions were taken as 'signals' that policymakers may be getting nervous about the ebullient wealth creation... Chinese stock futures are now down almost 7% - the 2nd biggest drop in 7 years.

This short must read Zero Hedge article was posted on their Internet site at 9:27 a.m. EDT yesterday morning---and doesn't bode well for the Monday open in the Far East.  My thanks go out to Dan Lazicki for finding it for us.


Marc Faber: The Chinese Will Not Print Money

In this episode of China Money Podcast, guest Dr. Marc Faber, renowned investor and publisher of The Gloom, Boom & Doom Report, speaks with our host Nina Xiang.

Dr. Faber shares his thoughts on why China's economic problems are solvable, explains the reasons behind his belief that China is likely to keep its currency stable, and rebukes the argument that capital may be flying out of China for a lack of confidence in the world's second largest economy.

Read an excerpt or watch an abbreviated video version of the interview. Be sure to listen to the full interview in the audio podcast.

This link contains a 7:24 minute video clip, along with a brief transcript, plus the entire 40:52 minute audio interview with Marc---so take your pick.  It was posted on the Internet site yesterday sometime---and I thank Nitin Agrawal for passing it around.


Meet Fiery Cross Reef, China's Man-Made Military Island Outpost

Last week, we noted the hilarious irony in President Obama’s contention that China was “using its sheer size and muscle to force other countries into subordinate positions.” That of course, is a picture perfect description of US foreign policy and so the statement by the President is effectively an indictment of Washington’s own actions. 

Obama’s remarks were made in the context of China’s construction “activities” in the South China Sea where Beijing shares contested waters with the Philippines, Vietnam, Malaysia, Brunei and Taiwan. Essentially, China is building islands atop the Fiery Cross Reef in the Spratly archipelago, which some believe will be used for military purposes.

This very interesting story, with lots of photos, showed up on the Zero Hedge website at 6:55 p.m. EDT on Friday evening---and it's another contribution from Dan Lazicki.  Here's a BBC story on the same issue headlined "China 'building runway in disputed South China Sea island'"---and it's courtesy of Roy Stephens.


Somebody besides GATA calls attention to the Bank for International Settlements

Last Saturday, Zero Hedge published a long excerpt from what may be the most recent serious treatment of the Bank for International Settlements, the 2013 book "Tower of Basel: The Shadowy History of the Secret Bank That Runs the World" by Adam LeBor---and while it's worth reading, it may not convey much new to people who have been following GATA for more than a few months, since GATA often has called attention to the bank's crucial role in rigging the gold market on behalf of its member central banks.

That is, offensive to democracy as its secret operations are, the BIS is more the servant of its members than their master. The big problem is not the BIS but that the political systems of the bank's major members have been taken over by their domestic financial classes.

To recover its democracy each country will have to wage its own struggle. Satisfying as it might be, nuking Basel tonight wouldn't really accomplish much. The bankers quickly would find themselves another clubhouse somewhere else, equip it with the most sophisticated computers and market-rigging programs, and be back in business in a week, with the trading room of the Federal Reserve Bank of New York picking up the slack in the interim -- at least until some financial news organizations dared to attempt the sort of journalism they've long been leaving to Zero Hedge.

This absolute must read GATA posting, along with the embedded commentary on the BIS, appeared on the website a week ago---and for length reasons, had to wait for today's column.  Reader U.D. beat Chris Powell to this story by six hours and change---and I thank Chris for "all of the above" paragraphs of introduction.


Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on the ongoing debt drama in Greece, a continuously slack economic recovery, his opinion on World Gold Council predictions for Chinese gold demand, and global supply and demand for physical gold.

This 9:16 minute audio interview with Eric, hosted by Geoff Rutherford, appeared on the Internet site yesterday afternoon.


U.S. must return rare double eagle gold coins to family

The U.S. government must return 10 exceptionally rare gold coins worth millions of dollars each to a Pennsylvania family from which the purloined coins were seized a decade ago, a federal appeals court ruled on Friday.

By a 2-1 vote, the 3rd U.S. Circuit Court of Appeals in Philadelphia said Joan Langbord and her sons Roy and David are the rightful owners of the double eagle $20 gold pieces, after the government ignored their claim to the coins and missed a deadline to seek their forfeiture.

"The government knew that it was obligated to bring a judicial civil forfeiture proceeding or to return the property, but refused," Circuit Judge Marjorie Rendell wrote. "Having failed to do so, it must return the Double Eagles to the Langbords."

Patricia Hartman, a spokeswoman for U.S. Attorney Zane Memeger in Philadelphia, said: "We are weighing our options."

This very interesting Reuters article was picked up by the Internet site around 1 p.m. EDT yesterday---and I thank "Roger" for finding it for us.


Gold is (Once Again) Money -- Jim Rickards

Only three major assets went up strongly in the past six months: U.S. dollars, Swiss francs and gold.

The dollar/gold correlation was most striking because they had been inversely correlated since 2011 with the dollar getting stronger and gold getting weaker. Suddenly, gold and dollars were gaining strength together against commodities, euros, yen, yuan and most other measures of wealth.

Using our causal inference models, our tentative conclusion is that gold is behaving like money again. This could be an early warning of a breakdown in the international monetary system as a result of persistent deflation and currency wars. Investors are moving to safe havens, and dollars, gold and Swiss francs are at the top of the list.

However, our intelligence collections and inferential models suggest that something even more profound may be going on. Russian and Chinese gold acquisition programs have been going on for years; that story is well known to our readers. But those acquisitions have now passed the point that Russia and China need to have a seat at the table in any new international monetary conference.

This must read commentary by Jim was posted on the Internet site yesterday---and I thank Dan Lazicki for his final offering in today's column.


Is gold tide beginning to turn? -- Lawrence Williams

Gold prices may well, for the time being at least, be driven by ups and downs in U.S. data and Fed interest rate raising speculation, coupled with the occasional impact of some peculiar massive gold trades on the markets, but we do see these things changing as Asia becomes ever more involved in global gold price setting.  We are already seeing the start of this, and it is bound to grow so gold probably is at or near its bottom, with better things ahead.

But gold price growth may well continue to proceed at a far slower pace than the precious metal’s adherents would anticipate, although at some point in time an inflection point will be reached (perhaps triggered by some key event) and we should see a big price surge yet again.

As always the question remains as to when this might occur. For the time being its always, as Lewis Carroll had the White Queen say to Alice in ‘Through the Looking Glass’ – “The rule is, jam tomorrow and jam yesterday, but never jam today” which Alice found most confusing saying “It must come sometimes to ‘jam today’” to which the White Queen demurred. But gold investors have to hope that indeed ‘jam today’ will come for the yellow metal and that that day will be soon at hand.

This interesting commentary by Lawrie---and brilliantly written closing paragraph---put in an appearance on the Internet site at 2:47 p.m. BST in London on their Friday afternoon, which was 9:47 a.m. EDT.



¤ The Funnies

If the cartoon below is lost on you, please click here. I didn't know it's meaning, either.

Cypress Development Corp. is a Canadian gold, silver and base metals exploration company developing projects in Red Lake, Ontario, Canada, and in Nevada, U.S.A.

Cypress holds a 100% interest in the approximately 1140 acre Gunman Zinc-Silver Project located in White Pine County, northeast of Eureka, Nevada. Three RC drill programs totaling approx. 38,000 feet have been completed by Cypress on the Gunman project with significant grades between 5% to 33% per ton zinc and 0.5 to 15.0 oz per ton silver over considerable widths encountered. Zinc could represent the next big base metal play due to ongoing demand growth and the closures of 3 major mines in Canada, Australia and Ireland and not enough supply coming on stream from new projects. Sentiment could shift towards zinc, with prices potentially rallying in anticipation of tightening supplies.


¤ The Wrap

Since it appears most, if not all of the metal shipped into the JPMorgan COMEX silver warehouse came from other COMEX silver warehouses, as opposed to being metal from outside the COMEX warehouse system, it doesn’t point to silver being in vast general oversupply. You may remember that it took until the last delivery day in the COMEX March delivery period for JPMorgan to get all of the 1,500 contracts allowed. Since those delivering against open futures contracts are better off delivering quickly, rather than later, the time JPMorgan had to wait to get its maximum number of physical deliveries suggests an unwanted and perhaps forced delivery circumstance on the part of the issuers.

While I’m talking about a reluctance to deliver physical silver against the March futures, this goes to a much broader issue. That issue is just because you can see it and count it, doesn’t mean it’s available. Not only is that true for the 175 million oz held in the COMEX warehouses, it is true for all the silver in the world, including the inventories in SLV and other ETF-type vehicles. Just because we can verify that a billion ounces or so exists in world inventories of 1,000 oz bars and those inventories are worth less than $20 billion at current depressed price levels, does it mean anyone can buy it.

Only those who own the 175 million ounces of silver held in the COMEX warehouses, or the one billion ounces of total silver bullion in the world, will decide at what price it is available for sale. While this can be said of any asset, in silver it is very special because of the extremely low total valuation, due to the artificial low price. Where I make the point that $20 billion is chump change in total’s financial world for a total asset class, the amount truly available for purchase is a tiny fraction of that already small total amount. That’s what makes the investment potential so great in silver. - Silver analyst Ted Butler: 15 April 2015

Today's pop 'blast from the past' is one that I've been avoiding for years.  Not because I don't like the song, because I do. It's because of its length.  But today I decided to bite the bullet and post it.  Those of you of a certain vintage will recognize the name Iron Butterfly---and only one song goes with the name---and the link to that classic 17-minute psychedelic rock number from 1968 is here.

Today's classical 'blast from the past' is much more sedate---and dates back to the late 18th century.  It's Wolfgang Amadeus Mozart's Sinfonia Concertante for Violin, Viola and Orchestra in E-flat major, K364 which he composed in 1779 when he was on a European tour.

This recording is on the older side---as it's in two parts.  In those days youtube videos couldn't be over 30 minutes in length, but one follows on the heels of the other, so you don't have to go looking for Part 2.  It's an all-star cast with Itzhak Perlman and Pinchas Zukerman, with Zubin Mehta conducting.  I've heard both of these violinists live when I was on the Edmonton Symphony Orchestra board of directors---and they are awesome.  Pinkas is playing the viola here, but is equally as proficient on the violin. The sound quality is first rate---and that's all that really matters.  The link is here.

With the world coming unglued at an ever faster pace, it was obvious that the powers-that-be would step into the precious metal markets once again---and that's precisely what they did.  Volumes were pretty low yesterday, so it wasn't all that hard to keep prices in line---but it's equally as obvious that regardless of the volume levels, the path of least resistance for gold and silver et al, was up---and probably dramatically so by the end of the Friday trading session.  And it was the fifth day in a row where gold wasn't allowed to get too far in the face of a rapidly declining U.S. dollar index.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday---and you can see the obvious price suppression in the face of a dollar decline---all brought about by JPMorgan et al trading in the COMEX futures market.

So, will gold go up or down from here?

The COT structure, as I said earlier, is market neutral at the moment---and with the dollar circling the drain and the equity markets world-wide starting to buckle under the strain, I'm sure that it's been a struggle for the President's Working Group on Financial Markets [a.k.a. The Plunge Protection Team] as they try too keep everything paper from imploding under its own weight.

Of course keeping everything that wants to blow sky high under control as well, is another sub-set of the PPT's job description---and at the moment, they're having an easy time of it.

But under the surface, changes are afoot---and the biggest red flag is the fact that JPMorgan has been buying massive amounts of physical silver since they initiated the drive-by shooting in that metal on May 1, 2011.  They've been very quiet and surreptitious about it up until March of this year---and if Ted Butler hadn't outed them---none of us would be the wiser, including you and I.

The last straw in all of this was their in-your-face-in-the-very-public-domain grab for 7.5 million troy ounces of silver for their own account [not for clients] during the March delivery month, the 1,500 COMEX contract maximum that any entity is allowed to take delivery of in one calendar month---all the while being heavily short the futures market in the same metal.

Since they're not only buying good delivery bars, but every U.S. silver eagle and Canadian maple leaf they can get their hands on, I doubt very much that the end game is further price suppression, unless they can get monster boxes of these coins added to COMEX good delivery status.

I've always been under the impression since Ted uncovered all of this that JPMorgan was in it for a Big Score---and that's spelled with a capital 'B'.  That will only occur when we have the expected-by-all financial and monetary reset at some point in the future.

The only question is---when will that be?

Borrowing a paragraph from Jim Rickards commentary at the Daily Reckoning posted in the Critical Reads section above, he had this to say "The [gold] withdrawals from the Federal Reserve represent efforts by central banks in Germany, Netherlands and elsewhere to take physical possession of their gold in advance of a systemic monetary breakdown."

And as I and others have said over the years, when gold is sporting it's new and out-of-reach price for all but the very rich, then silver will become the "new" gold---and that appears to be what Jamie Dimon & Co. are preparing for.

So we wait some more.

That's all I have for today which, as usual, is more than enough.

But before heading off to bed, I'd like to point out one more time that Casey Research's own Louis James has been watching a company that he is convinced will be the world's next high-grade gold producer.

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

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

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

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

Ed Steer