Casey Research Publication
Gold & Silver Daily
"It's obvious that the CFTC and the CME Group will do nothing to reign in the crooks in the Comex futures market."
 

¤ Yesterday In Gold & Silver

As I mentioned in 'The Wrap' section of yesterday's column, the gold price didn't do much in the Far East on Friday until about fifteen minutes before the London open...and then a not-for-profit seller showed up on the Globex trading system...and had gold down about fifteen bucks in short order.

From there it traded sideways to up until about 11:30 a.m. local time in London.  Then another seller showed up...and the gold price declined to its low of the day...$1,703.40 spot...with the low occurring about five minutes after the Comex opened in New York.

The subsequent $20 rally lasted until about 11:10 a.m. Eastern...with the price topping out around the $1,724 spot mark.  After that, the gold price traded more or less sideways for the rest of the New York trading session...although it did get sold off a bit once the Comex closed at 1:30 p.m...and the trading in the New York Access Market began.

Gold closed at $1,722.10 spot...down $7.00 on the day.  Net volume was pretty brisk at around 159,000 contracts...most of it of the meaningless HFT variety.

The silver price mirrored the gold price pretty much all day on Friday.  Like gold, the low tick of the day in silver came at 7:25 a.m. Eastern...five minutes after Comex trading began in New York.

From that low tick, $33.09 spot, silver also rallied, but ran into the same not-for-profit seller at 11:10 a.m. just as it was about to take out Thursday's closing price and penetrate the $34.00 spot price level once again.

After the high was in, silver got sold off until well into the electronic trading session...and then proceeded to recover about half that loss going into the 5:15 p.m. close.

Silver closed at $33.59 spot...down 31 cents on the day.  Net volume was pretty decent at 37,000 contracts.

Here's the 30-day silver chart.  Note how the $34.00 spot price level is being defended.  One has to wonder why...and by whom?  I think I know the answer to both.

(Click on image to enlarge)

The dollar index chopped around between 78.6 and 78.8 until precisely 7:00 a.m. New York time, before a rally of some substance put in an appearance...and by 8:45 a.m. the dollar index had risen 40 basis points to 79.20.  It could not hold that price level...and slid back to the 79 cent mark right at the close of trading in New York at 5:15 p.m.

If you can match the precious metals price action to the dollar index movements, you've got a better eye than I do.

Like the rest of the U.S. equity markets, the gold shares gapped down...and then more or less followed the gold price from there.  The HUI closed down 1.72% for the day...and 3.23% on the week.

The silver shares finished mixed on the day...and Nick Laird's Silver Sentiment Index closed down 1.05%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that only 27 gold contracts and zero silver contracts were posted for delivery on Tuesday.

The authorized participants deposited a very tiny 9,718 troy ounces of gold into GLD yesterday...and there were no reported changes in SLV.

For the second day in a row there was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Thursday, they reported receiving 681,699 ounces of silver...and shipped 832,769 ounces of the stuff out the door.  The link to that activity is here.

Well, the Commitment of Traders Report lived up to my worst fears.  In silver, the Commercial traders were the not-for-profit sellers once again...as they increased their short position by a monstrous 5,921 contracts, or 29.6 million ounces.  The total Commercial net short position in silver is now up to 34,650 contracts, or 173.3 million ounces.

Back at the end of December, when silver hit $26 the ounce, the Commercial net short position in silver was all the way down at 14,100 contracts, or only about 71.0 million ounces.  So, in the space of less than six weeks, the Commercial traders have added a bit over 20,000 contracts to their short positions...or 100 million ounces.

If these commercial traders, who neither produce nor consume the metal, were not there to go short against all the new long positions being placed, then the price of silver would be well north of $100 the ounce right now.  Readers ask me what I mean by 'not-for-profit' sellers...well, here they are.

The Commercial traders are only there for one reason and one reason only...and that's to prevent the price from exploding to the outer edges of the known universe.  Their rewards for doing this dirty work, besides making big profits on their engineered price declines, is protection from prosecution by the CME and the CFTC.

It is also obvious to me that JPMorgan and the other large Commercial traders are in no rush to cover their obscene short positions.  I'll have more on that when I discuss the Bank Participation Report further down.

In gold, the not-for-profit Commercial traders added 11,210 contracts to their short positions, as the large and small speculators added to their long positions.  The Commercial net short position is back up to 22.1 million ounces, which I'm sure Ted Butler isn't happy about either.

I haven't posted this "Days of World Production to Cover Short Positions" graph for quite a while. Ted Butler asked Nick Laird to make it up for him many years ago.  It's obvious from the chart that the four precious metals are the center of attention for the bullion banks...with silver being the most controlled...and that the '4 or less' traders [mostly JPMorgan in all four metals] are totally dominant in each, as the '5-8' traders [the difference between the green and red bars] are a very small portion of the total 'Days to Cover'.

(Click on image to enlarge)

In silver, as of Tuesday, the '4 or less' traders were short 176.5 million ounces of the stuff, which is 3 million ounces more than the entire Commercial net short position.  The '5 through 8' Commercial traders are short 38.2 million ounces of silver on top of that.  When you remove the market-neutral spread trades from the Non-Commercial category, these eight traders hold more than 50% of the entire short position in the Comex futures market in silver.  That's called a 'concentrated short position'...and the reason why silver is at $34/ounce, instead of $134/ounce...or more.

The February Bank Participation Report, for positions held at the close of trading on Tuesday, February 7th, did not make for happy reading either.

This data comes directly from the same data that the COT report is derived from, so for this one day per month, it's possible to see where the U.S. bullion banks fit into the grand scheme of things in the weekly COT report.

In silver, four U.S. bullion banks are net short 20,840 Comex futures contracts.  That's a 5,000 contract increase from the January report...and exactly what Ted Butler said it would be.  I'd bet a lot of money that well north of 90% of this short position is held by JPMorgan and HSBC.  When you remove the market-neutral spread trades from the Non-Commercial category, these four U.S. bullion banks are short 24.2% [minimum] of the Comex futures market in silver all by themselves.

In February, the twelve non-U.S. banks that hold Comex future contracts were net short 1,195 between them...about 100 contracts each.  In the January report, these same twelve banks were net long 100 contracts each!  As you can tell, the price fixing operation in silver is strictly a U.S. bullion bank affair.

In gold, the February Bank Participation Report showed that five U.S. bullion banks were net short 104,717 Comex futures contracts...which was an increase in their net short position of 24,791 Comex in one month.  As of Tuesday, these five U.S. bullion banks were net short 25.4% of the Comex futures market in gold.

In February, the nineteen non-U.S. banks were net short 35,747 Comex futures contract, which is an increase of about 4,100 contracts since the January report.  On average, each non-U.S. bank is short less than 2,000 Comex contracts...but it's my guess that the short positions in gold are not equally distributed between banks, as some would be carrying larger short positions than others.  Too bad they don't list the names of the banks as well...LOL!

These nineteen non-U.S. banks hold a net short position of about 8.3% of the net open interest in gold.  Once again it's obvious that the gold price fixing scheme is mostly 'Made in the U.S.A.' as well.

Here's a chart that I dug up the other day.  I have the website bookmarked, but rarely check it. However a story I read on Friday sort of jogged my memory.  This is the Baltic Dry Index...and it's just set a new 10-year low.  It's a combination of lousy international economic conditions...and the fact that a lot of shipping that was ordered in the boom times is now being delivered, further depressing the price.

The graph below is courtesy of Washington state reader S.A....and requires no further explanation from me.

Lastly is this Global Indices chart that Nick Laird sent me just after midnight.  This last rally in the world's equity markets was on very narrow [and declining] volume...and as Nick said in his covering e-mail..."Appears to have topped out here.  Soon we'll find out if the fiat-drenched rally is genuine or not."  I agree.

(Click on image to enlarge)

I have a lot of stories for your reading pleasure this weekend...and some of them are pretty big reads that I've been saving for today's column.  So I hope you have time to read them all, as they are certainly worth it.

 

¤ Critical Reads

MF Global Trustee Sees $1.6 Billion Customer Shortfall

MF Global commodity customers whose cash vanished when the firm collapsed last year are owed $1.6 billion — up significantly from previous estimates — the trustee tasked with recovering the money said on Friday.

The revised figure reflects growing concerns that the trustee will not be able to claw back $700 million in customer money trapped overseas. Until now, the trustee did not include the $700 million when projecting the shortfall, hoping to avoid a battle with MF Global’s British arm, which is holding the customer money.

But now the trustee, James W. Giddens, has acknowledged that he is making little headway in recovering the money from KPMG, the court-appointed administrator for MF Global’s British subsidiary. That money, Mr. Giddens said, was held for American clients who traded on foreign exchanges.

This story was posted on The New York Times website late yesterday afternoon...and I thank reader Phil Barlett for sending it to me in the wee hours of this morning. The link is here.

Read more...

Pimco: Foreclosure Deal Cheaper Than Pensions

The government’s deal with banks over their foreclosure practices after 16 months of investigations is cheap for the loan servicers while costly for bond investors including pension funds, according to Pacific Investment Management Co.’s Scott Simon.

In what the U.S. called the largest federal-state civil settlement in the nation’s history, five banks including Bank of America Corp. and JPMorgan Chase & Co. committed $20 billion in various forms of mortgage relief plus payments of $5 billion to state and federal governments yesterday.

“This was a relatively cheap resolution for the banks,” said Simon, the mortgage head at Pimco, which runs the world’s largest bond fund. “A lot of the principal reductions would have happened on their loans anyway, and they’re using other people’s money to pay for a ton of this. Pension funds, 401(k)s and mutual funds are going to pick up a lot of the load.”

This Bloomberg story was posted yesterday afternoon...and I thank West Virginia reader Elliot Simon for providing it...and the link is here.

Read more...

Office & Retail Delinquencies Hit New Highs as Overall CMBS Late-Pays Drop

Delinquencies for office and retail loans have hit their highest-ever levels while overall U.S. CMBS delinquencies  fell for the sixth straight month, according to the latest index results from Fitch Ratings.

CMBS late-pays declined five basis points (bps) in January to 8.32% from 8.37% a month earlier. The improvement was driven by multifamily loans, which saw a 165-bp plunge in its rate month-over-month to 12.77%. The delinquency rates for office and retail rose to all-time highs of 7.30% and 7.21%, respectively.

January marked the first time post-recession that the office delinquency rate surpassed that of retail. Office is the only major property type that Fitch Ratings has a negative outlook on for 2012. Office delinquencies are expected to continue rising as leases made at the height of the real estate boom roll to market, impacting income available to cover debt service.

This story was posted on the fitchratings.com website...and I thank reader "Ryan" for sending it my way.  The link is here.

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U.S. Postal Service loses $3.3 billion in first quarter

The U.S. Postal Service's losses shot up to $3.3 billion in the last three months of 2011, a tenfold jump from the same period a year before, as its customer base eroded with the growth of email and online billing.

The cash-strapped agency recorded the loss during its traditionally strongest period, the year-end holiday shipping season, as declines in mail volumes outweighed growth in shipping.

"Technology continues to have a major impact on how our customers use the mail," Postmaster General Patrick Donahoe said in a statement on Thursday.

This Reuters piece from yesterday is also courtesy of Elliot Simon...and the link to that is here.

Read more...

Fed Playing Favorites With Wall Street in Secretive Bond Deals: Mortgages

The Federal Reserve secretly selected a handful of banks to bid for debt securities acquired by taxpayers in the U.S. bailout of American International Group Inc., and the rest of Wall Street is wondering what happened to the transparency the central bank said it was committed to upholding.

“The exclusivity by which the process has shut out smaller dealers is a little un-American,” said David Castillo, head of sales and trading at broker Further Lane Securities LP in San Francisco, who said he would have liked to participate. “It seems odd that if you want to get the best possible price that it wouldn’t be open to anyone who wants to put in the most competitive bid.”

After inviting more than 40 broker-dealers to take part in a series of auctions last year, the Federal Reserve Bank of New York asked only Goldman Sachs Group Inc., Credit Suisse Group AG and Barclays Plc to bid on the full $13.2 billion of bonds offered in two sales over the past month. The central bank switched to a less open process after traders blamed the regular, more public disposals for damaging prices in 2011. This week, Goldman Sachs bought $6.2 billion of bonds in an auction.

This story was filed late Thursday night on the Bloomberg website...and I thank Washington state reader S.A. for sending it along.  The link is here.

Read more...

Gross vs. Buffett on Treasuries

Pacific Investment Management Co.’s Bill Gross increased his holdings of Treasuries to the highest level since July 2010, while billionaire investor Warren Buffett called them “dangerous.”

“They are among the most dangerous of assets,” Buffett said yesterday in an adaptation of his annual letter to shareholders on Fortune magazine’s website. “Over the past century these instruments have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal.”

Gross boosted U.S. government and Treasury debt to 38 percent of assets in Pimco’s $250.5 billion Total Return Fund, the world’s biggest bond fund. The position in January climbed from 30 percent in December, according to a report on the company’s website yesterday.

This Bloomberg story is also an Elliot Simon offering...and the link is here.

Read more...

Is This The End of Wall Street As They Knew It?

The crash four years ago was shocking enough to the financial class. But what is happening on Wall Street now is even more terrifying. No doubt the economy itself—the crisis in Europe, the effects of the tsunami in Japan, America’s sputtering recovery—has played a large part in the financial industry’s struggles. But even the most stubborn economies improve eventually. The bigger issues are structural. The Dodd-Frank financial-­reform act, much maligned, has already begun to change the shape of the financial system—even before a number of its major provisions are proposed to go into full effect this coming July. Banks are working hard to interpret Dodd-Frank’s provisions in a way most favorable to them—and repealing Dodd-Frank is a key piece of Mitt Romney’s campaign platform.

With all the major banks unable to wager their own funds on big bets, there’s a growing sense that the money that was being made during the Bush boom won’t be back. “The government has strangled the financial system,” banking analyst Dick Bove told me recently. “We’ve basically castrated these companies. They can’t borrow as much as they used to borrow.”

Of course, described a little less colorfully, reducing the risk in the system at a cost of a certain amount of the banks’ profits was precisely what the government was striving for. All this has meant that Wall Street’s traders have found themselves on the wrong end of the market—a predicament that many of them have never seen before. Before the crash, when compensation slid, the banks risked seeing their top talent run for the doors to rival firms or hedge funds. Now, with a glut of hedge funds and an industry-wide belt-tightening, bank chiefs are calling their star traders’ bluffs. “If you’re really unhappy, just leave,” Morgan Stanley CEO James Gorman bluntly told Bloomberg TV a few days after his bank announced its meager bonus numbers.

This very long exposé appeared in the February edition of the New York Magazine...and I thank Washington state reader S.A. for digging it up on our behalf.  This is well worth the read if you have the time...and the link is here.

Read more...

Can Ron Paul Be Tamed? - Justin Raimondo

No, but his campaign can.

You know you’ve hit the big time when the Establishment comes knocking on your door with an offer to sell out. It means you’re drawing blood: that your campaign, or whatever, is having an effect — and not one that pleases the Powers That Be. They want to defang you, if not shut you up, and they’re willing to offer you what Satan offered Jesus up there on that mountain:  

"Again, the devil taketh him up into an exceeding high mountain, and sheweth him all the kingdoms of the world, and the glory of them; And saith unto him, All these things will I give thee, if thou wilt fall down and worship me. Then saith Jesus unto him, Get thee hence, Satan: for it is written, Thou shalt worship the Lord thy God, and him only shalt thou serve. Then the devil leaveth him, and, behold, angels came and ministered unto him."

If Ron Paul isn’t exactly Jesus, many of his supporters treat him as if he is indeed the incarnation of Liberty in human flesh: the media routinely describes them as "fanatical" – or, more charitably, "devoted" – and I don’t blame them for their enthusiasm (indeed, I share it). Paul is undoubtedly a messianic figure, although he is the last one to give himself that kind of aura, and that’s because we are indeed living in a time of woe, from whence a great many people are seeking deliverance. Ron is their one hope, a bright spot in an ever-darkening and increasingly scary world – and our elites don’t like that one bit.

This Elliot Simon offering was posted over at the antiwar.com website on the February 3rd...and it's an eye-opener.  The link is here.

Read more...

Dinner at Rupert's

What happened on the fateful night last May when Rupert Murdoch decided how News Corp. would manage its phone-hacking scandal?

Red wine in hand, Rupert Murdoch chatted with guests at his London townhouse on what would be one of the most important nights to the future of his company. Gathered for cocktails were Rupert’s son James, heir apparent to the family media empire; Rebekah Brooks, the chief executive of News Corp.’s U.K. unit; and Chase Carey, the New York-based president and chief operating officer. Joining the executives were a pair of legal heavyweights: Joel Klein, former New York City schools chancellor, and Brendan Sullivan Jr., the well-connected Washington lawyer brought into the Murdoch fold at Klein’s request.

It was May 19, 2011. The senior Murdoch had flown in two days earlier for a whirlwind of meetings with his top London executives. He had called the dinner party to hash out once and for all how to handle the phone-hacking scandal that had been hanging over the company for months and was suddenly spinning out of control. A lawsuit filed by actress Sienna Miller—charging that a senior editor at the company’s British Sunday tabloid, News of the World, was behind a campaign to hack into her phone—sparked a police investigation, producing a steady drip of disclosures about repeated incidents of phone hacking at Murdoch’s British tabloids.

This businessweek.com piece from Thursday is an amazing read...and I thank Washington state reader S.A. for sending this along.  This story is worth your while as well...and the link is here.  You can't make this stuff up.

Read more...

Greece’s November Unemployment Rate Increases to 20.9%

Greece’s unemployment rate rose in November to a record high, while declining industrial production in December indicated a deepening economic contraction in the final quarter.

The unemployment rate rose to 20.9 percent, from 18.2 percent the previous month, the Hellenic Statistical Authority said today in an e-mailed statement. The November rate was the highest since the data series began in 2004. Industrial output fell 11.3 percent in December from a year earlier, according to a separate statement.

November unemployment among those under 24 was 48 percent, up from 35.6 percent in the year-earlier month. The highest regional rate was 23.8 percent in Macedonia-Thrace, in northern Greece. Unemployment in the Attica region, which includes Athens, was 21.1 percent, up from 13.9 percent a year earlier.

This short Bloomberg story was one I dug out of yesterday's King Report...and the link is here.

Read more...

The World from Berlin: 'Without a New Beginning, Athens Is Lost'

The European Union is demanding even greater sacrifices from Greece, despite the deal reached by politicians in Athens on Thursday. Facing more painful cuts, Greek citizens are back on the streets as resentment boils over. German commentators say it's time to finally face the truth.

"Whether the resulting conclusion is that Greece can no longer be saved from bankruptcy, or whether it should be persuaded -- or forced -- to leave the euro zone, is ultimately a question of math. Which option will end up being more expensive for Greece and its public and private-sector creditors? No finance minister knows the answer, and no economist can calculate it reliably. This uncertainty is deadly, both for the markets and for countries. It must be ended quickly."

This story was posted over at the German website spiegel.de yesterday...and I thank Roy Stephens for sending it.  The link is here.

Read more...

Greek prime minister warns of 'uncontrolled chaos' if country defaults

Greece's plans to avert bankruptcy were in chaos on Friday night as politicians, police and protesters formed a powerful and violent opposition to the internationally-imposed austerity measures.

Lucas Papademos, prime minister, struggled to maintain order in parliament ahead of Sunday's crucial vote on the budget plans which he needs to win to secure Greece's €130bn (£109bn) bail-out.

Six ministers resigned in protest over the budget plans, which include tough spending and pension cuts, that were approved on Thursday by political leaders.

Late on Friday night, the remaining members of the cabinet approved the draft bill of austerity measures which the country's parliament will vote on Sunday.

This story was posted in The Telegraph late on Friday evening in London...and I thank Roy Stephens for sending it along.  The link is here.

Read more...

Is Portugal Next? - German Finance Minister Suggests Lisbon Bailout Flexibility

First Greece and then Portugal? That is what many skeptics of Europe's handling of the ongoing debt crisis have long been saying. And on Thursday evening in Brussels, they appear to have received high level confirmation.

In a video clip apparently made without his knowledge at the meeting of euro-zone finance ministers, German Finance Minister Wolfgang Schäuble told his Portuguese counterpart Vitor Gaspar that Berlin would be willing to make adjustments to the Portugal bailout package. It was the first time that a high level euro-zone official had admitted that such changes may become necessary.

"If then there would be a necessity for an adjustment of the Portugal (program), we would be ready to do that," Schäuble says in the video, which was posted on YouTube and on the website of the Portuguese television station tvi24. Gaspar responds: "That is much appreciated."

This is another offering from Roy Stephens...and it's posted over at the spiegel.de website.  The link is here.

Read more...

Run-up to proxy war over Syria

If a date needs to fixed marking the end of "post-Soviet era" in world politics, it might fall on February 4, 2012. Russia and China's double veto of the Arab League resolution on Syria in the United Nations Security Council constitutes a watershed event.

Curiously, the secretary general of the North Atlantic Treaty Organization (NATO) Anders Fogh Rasmussen chose the same day as the veto in New York to snub Russia; saying that the alliance would have the first elements of the US's missile defense system (ABM) up and running in Europe by the alliance's summit in May in Chicago, no matter Moscow's objections.

The first double veto by Russia and China on the Syrian issue in the United Nations Security Council last October was a coordinated move that sought to scuttle a resolution that might be seized by the Western alliance to mount a military operation in Syria. But the repeat double veto on a motion pressing Syria's President Bashar al-Assad to abandon power conveys a much bigger meaning.

"...much bigger meaning." is an understatement.  For all students of the new "Great Game" and America's "Full Spectral Dominance"...this is a must read from one end to another.  The absolute naked truth is hard to find these days...but here's some.

Roy Stephens sent me this Asia Times story earlier this week...and it's worth repeating that this is a must read.  The link is here.

Read more...

Flagship EU gas pipeline project 'near collapse'

Europe's flagship project to bolster its energy security by building a major gas pipeline to the Caspian that skirts Russia is near collapse, analysts say, with a newly confident Turkey playing a key role.

Recent developments, including decisions by Ankara, have undercut the viability of the Nabucco pipeline, a project to ship more than 30 billion cubic meters of gas per year from the Caspian and beyond to Europe.

Repeated disputes between Russia and Ukraine over transit tariffs that led to supply cuts pushed the EU in 2009 to launch its Southern Gas Corridor initiative, of which Nabucco is the biggest project, to reduce its dependence on Russian gas supplies.

But in December, Turkey gave Russia the green light for its South Stream project to run through its Black Sea waters, with construction of the 63 billion cubic meters (bcm) per year pipeline to start by the end of this year.

"The Nabucco project was in a coma long before the South Stream agreement," said Necdet Pamir, a former deputy director of Turkey's TPAO oil company.

"But nobody dares to say Nabucco is already dead," he told AFP.

This AFP story was posted in the Tehran Times on Monday...and it's a very interesting read if you're any kind of energy wonk.  I thank Roy Stephens once again...and the link is here.

Read more...

Truth, lies and Afghanistan: How military leaders have let us down - Lt. Col. Daniel Davis

I spent last year in Afghanistan, visiting and talking with U.S. troops and their Afghan partners. My duties with the Army’s Rapid Equipping Force took me into every significant area where our soldiers engage the enemy. Over the course of 12 months, I covered more than 9,000 miles and talked, traveled and patrolled with troops in Kandahar, Kunar, Ghazni, Khost, Paktika, Kunduz, Balkh, Nangarhar and other provinces.

What I saw bore no resemblance to rosy official statements by U.S. military leaders about conditions on the ground.

Entering this deployment, I was sincerely hoping to learn that the claims were true: that conditions in Afghanistan were improving, that the local government and military were progressing toward self-sufficiency. I did not need to witness dramatic improvements to be reassured, but merely hoped to see evidence of positive trends, to see companies or battalions produce even minimal but sustainable progress.

Instead, I witnessed the absence of success on virtually every level.

There were no surprises for me in this excellent essay by the above mentioned officer.  It's a must read for all Americans...and non-Americans.  Several readers sent me this story earlier this week, but the first one through the door with it was Ken Metcalfe.  It's posted over at the armedforcesjournal.com website...and the link is here.

Read more...

Withholding Consent from the Khan

People all over the world — in the United States, the eurozone, Asia, Africa, the Middle East, and everywhere in between — are now inescapably facing the consequences of a century of unmitigated fiat-currency expansion. In response, a global movement has risen to search for solutions to the central-bank-engineered deterioration of standards of living, purchasing power, employment prospects, and economic health in general.

Is activism that appeals directly to the political class and central bankers — the individuals who are directly responsible for the current economic morass — a logical course of action? A review of history reveals some alternatives; what follows is one of them.

Beginning in 1206, Mongol invaders swept west and east from central Asia to become the largest contiguous empire in the history of the world. As it expanded, the conquered territories were administratively partitioned into subkingdoms where the Khan's rulings could be enforced in accordance with local political and cultural flavors. One such subkingdom was the Ilkhanate, which covered portions of modern Iran, Iraq, Syria, Turkey, and Afghanistan, and had as its seat of power the city of Tabriz.

This absolutely amazing essay was posted over at the mises.org website on Monday...but I've had to wait until today to post it.  Once again I thank West Virginia reader Elliot Simon for sharing this story with us.  In my opinion that it's a must read...and the link is here.

Read more...

Putin's Unruly Children: A New Generation Aims to Revitalize Russia

Russia's young people are growing up with more freedom than ever. Twenty years after the end of communism, the first post-Soviet generation is transforming the country -- whether the once and future president likes it or not.

The Kremlin still uses state-run TV to drive home its propaganda about how Russians should be thankful for the stability they enjoy under Putin. But Russia's youth hardly watches TV anymore. Instead, young Russians spend their time in the free worlds of the Internet, getting their information and organizing through blogs, Facebook and Twitter. For the first time in generations, an entire segment of Russians can steer clear of government propaganda, depriving the Kremlin of control over large parts of their lives.

This is something new, and it has already led to a change in values and a new view of society. As diverse as they are, Putin's children are no longer afraid. They stand behind their ideals. They dream of democracy and a free press. Some envision careers as politicians or fashion journalists, while others dream of a nationalist Russia. But does the Putin generation also have the strength to break away from the top-down paradigm in place since the czars -- and to change the country from below?

Here's another amazing read.  This essay, which was posted over at spiegel.de on Thursday, is very long...but very much worth your while.  It's Roy Stephens last offering in today's column...and the link is here.

Read more...

Forget global warming - it's Cycle 25 we need to worry about (and if NASA scientists are right the Thames will be freezing over again)

Met Office releases new figures which show no warming in 15 years.

The supposed ‘consensus’ on man-made global warming is facing an inconvenient challenge after the release of new temperature data showing the planet has not warmed for the past 15 years.

The figures suggest that we could even be heading for a mini ice age to rival the 70-year temperature drop that saw frost fairs held on the Thames in the 17th Century.

Based on readings from more than 30,000 measuring stations, the data was issued last week without fanfare by the Met Office and the University of East Anglia Climatic Research Unit. It confirms that the rising trend in world temperatures ended in 1997.

I've said from Day One that this Global Warming scare was a complete fabrication...and from my past work in meteorology and climate, I'm in a position to know.  And the data to debunk it all came from the most unlikely source...the University of East Anglia, where they originally 'cooked the books' on behalf of the global warming theory.

I thank Casey Research's own Doug Hornig for digging this story out the January 29th edition of the Daily Mail in London.  It's a must read...and the link is here.  [If someone has Al Gore's e-mail address, I wonder if you would kindly forward this story to him.  Thanks in advance.]

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Gold advocate Pollitt 'cared more about being right than being rich'

Murray Hoult Pollitt was a stockbroker, entrepreneur, and adviser to Canada's financial elite. Raised in the entourage of some of Canada's wealthiest and most powerful families -- he was the nephew of Bud McDougald and grew up near Conrad Black -- Pollitt preferred his father's approach of building wealth through industry rather than through financial engineering.

Pollitt died last Sunday while watching the Super Bowl at home after a 12-year battle with prostate cancer. He was 70.

He won respect from clients and colleagues for the independence of his financial analyses and the conviction with which he defended them. While he worked long hours as a broker and inspired a generation of investors in gold, he scorned the promotional side of business. His investment boutique, Pollitt & Co., remained small.

"He taught all of us who knew him personally what integrity and character really meant," said Alex Christ, the 74-year-old founder of Mackenzie Financial Corp., a fund-management company.

Canada's Globe and Mail does a story on the grand old man himself...the Great White North's answer to Richard Russell.  The newspaper headline reads "Cynical financial adviser forecast gold’s astronomical rise".  I stole this story out of a GATA release in the wee hours of this morning...and the link is here.

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Permanent Gold Backwardation

Could backwardation happen with gold? Gold is not in shortage. One just has to measure abundance using the right metric. If you look at the inventories divided by annual mine production, the World Gold Council estimates this number to be around 80 years. 

In all other commodities (except silver), inventories represent a few months of production. Other commodities can even have "gluts," which usually lead to a price collapse. As an aside, this fact makes gold good for money. The price of gold does not decline, no matter how much of the stuff is produced. Production will certainly not lead to a "glut" in the gold market pulling prices downward.

So, what would a lower price on gold for future delivery mean compared to a higher price of gold in the spot market? By definition, it means that gold delivered to the market is in short supply.

The real meaning of gold backwardation is that trust in future delivery is scarce.

This essay showed up in yesterday's edition of Casey's Daily Dispatch...and is a must read.  The link is here.

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Celente - Gold, Silver, War, Systemic Collapse & Social Unrest

With growing fears about the stability of the financial system, a looming war and a stampede of wealthy investors into hard assets, today King World News interviewed Gerald Celente, Founder of Trends Research and the man many consider to be the top trends forecaster in the world.  Celente had this to say about an increased number of investors that have been crowding into gold and other hard assets:  “The smart people are (buying gold) and more and more people are waking up to it.  So the people that are going to survive and thrive are going to be the ones that are prepared, the ones that are going to see history before it happens and get ready for it and there are very few.”

Eric sent me this KWN blog yesterday morning...and the link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

I've got a double header for you in the 'blast from the past' department today.  Both are from the hippie era back in the 1960s.  That's almost 50 years ago now.  I was 19 years young at the time...and living in Toronto.  It was heaven!  Where the hell did the time go?  Both are by the same group...The Young Rascals...the link to the first song is here...and the second is here.  Even if you're not getting a little long in the tooth, you should still know them.

It was pretty much the same old, same old yesterday...and I'm not going to dwell on it, as this column is far too long already.

I'm not happy about the continuing deterioration in the Commitment of Traders Report...as it doesn't appear that anything has changed...and this rally, whenever it ends, will end in the same old way...with the Commercial traders putting their heads together and pulling the lever once they figure they've got all the longs sucked in that they can.

It's obvious that the CFTC and the CME Group will do nothing to reign in the crooks in the Comex futures market, so it's up to the market forces to do it for us...and the way things are headed, that's pretty much baked in the cake at some point down the road.

It's already obvious that trillions of dollars of European debt is going to have to be written off...and Greece is only the down payment on that process.  Once the process gets started in earnest, the very fiat currency on which all this debt is based will come into question...starting with the Euro and migrating very quickly to the dollar.  Once the trust is gone, the precious metals will be all that's left.

Here's one last chart that Nick Laird sent me early this morning.  It's the Transparent Precious Metal Holdings graph.  It contains the total physical ounces of all known precious metal depositories, ETFs, funds, etc.  It's now at a new record high in ounces...and it won't be too long before it's back to a record high in US dollar terms as well.  I hope you're getting your share.

(Click on image to enlarge)

There's still time to either re-adjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well.  And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

I'm outta here.  See you Tuesday.