Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

After doing nothing from a price perspective all through Far East trading on their Friday, the gold price caught a bid shortly after 9:00 a.m. BST.  It chopped higher, but got capped at the London p.m. gold fix---and then was sold down in the 1:30 p.m. COMEX close before rallying a bit more---and then trading sideways into the 5:15 p.m EDT close of electronic trading.

The low and high ticks were reported by the CME Group as $1,192.90 and $1,210.60 in the June contract.

Gold finished the Friday session in New York at $1,207.30 spot, up $13.80 on the day.  Net volume was 116,000 contracts, which was only 6,000 more contracts than on Thursday.

Here's the 5-minute tick chart for gold.  The Friday open is at 1600 MDT on this chart---and midnight EDT is 2200 MDT, the grey line on the chart.  Note all the heavy selling into the rallies starting shortly after 02:00, which was 4 a.m. EDT, 9:00 a.m. BST.  This chart is Denver time, so add two hours for New York, plus five more for British Summer time.  The 'click to enlarge' feature is a must---and I thank Brad Robertson for sending it along.

It was almost an identical chart pattern for silver, so I shall spare you the play-by-play.  And, like gold, prices would have closed materially higher if JPMorgan et al hadn't shown up at the London p.m. gold fix.

The low and high ticks were reported as $16.14 and $16.65 in the May contract.

Silver closed yesterday at $16.485 spot, up 33.5 cents, but well off its high tick.  Net volume was 33,000 contracts---and only a couple of thousand more than on Thursday.

The platinum and palladium charts were similar, but palladium hung on to most its gains after the London p.m. gold fix.  Platinum closed on Friday at $1,172 spot, up $18 on the day.  Palladium did even better, as it finished the Friday session up 14 dollars, almost two percent---and closed at $775 spot.  Here are the charts.

The dollar index closed late on Thursday afternoon in New York at 98.97---and developed a slightly negative bias at the early morning open in Far East trading.  All that changed a few minutes before 2 p.m Hong Kong time, as the index roared to life---and topped out at 99.69 about ten minutes before the COMEX open.  It dropped back to the 99.20 level at, or shortly before, the London p.m. gold fix---and then rallied a bit into the COMEX close, before selling off from there.

The dollar index closed on Friday at 99.35---up 38 basis points from its Thursday close.

The gold stocks gapped up---and stayed up, closing almost on their high tick.  The HUI finished the Friday session up 2.92 percent.

The silver equities blasted skyward at the open---and within twenty minutes all their morning gains were in---and they drifted quietly lower until a few minutes before 3:00 p.m. EDT.  from there they rallied into the close.  Nick Laird's Intraday Silver Sentiment Index finished the day up 2.85 percent.

The CME Daily Delivery Report showed that, for the second day in a row, there were no gold or silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

This is the first time I can remember back-to-back days where there were no deliveries in either precious metal---and considering the contracts outstanding in the current delivery month, especially in gold, I'm not sure what to make of it.

The CME Preliminary Report for the Friday trading session showed that gold open interest in April rose by 8 contracts---and now sits at 2,470 contracts still open.  Open interest in silver for April was up 5 contracts to 175.

After a deposit on Thursday, an authorized participant made a withdrawal from GLD on Friday.  This time they took out 56,377 troy ounces.  And as of 6:54 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I was editing this column at 4:20 a.m. EDT this morning, I saw that 2,390,780 troy ounces had been deposited---and it's a good bet that it was used to cover an existing short position.

There was a sales report from the U.S. Mint yesterday.  They reported selling 500 gold eagles---1,000 one-ounce 24K gold buffaloes---and 60,000 silver eagles.

Month-to-date the mint has sold 4,000 troy ounces of gold eagles---4,000 one-ounce 24K gold buffaloes---and 843,000 silver eagles.  Based on these sales, the silver/gold ratio so far in April is 105 to 1.

If that large silver eagle buyer wasn't there, read JPMorgan, silver eagles sales would be in the dumpster as well.  Retail bullion demand in North America is almost nonexistent at the moment, despite what the lunatic fringe may say.

At the COMEX-approved depositories on Thursday, no gold was reported received, but 56,172 troy ounces were shipped out of Canada's Scotiabank.

In silver, it was another huge day, as 893,037 troy ounces were received, all of which went into JPMorgan's vault---and another 2,198,179 troy ounces were reported shipped out the door.  The link to that activity is here.

Combined with the 2.39 million troy ounces that went into SLV yesterday---and adding in the last three days worth of frantic in/out activity at the COMEX-approved depositories---it's been a hell of a week in the physical silver market---and it's a good bet that most of the bars involved now have "frequent flyer" points up the wazoo.

In Hong Kong at the COMEX-approved gold depository at Brink's, Inc.---it was another busy day as well, as 8,154 kilobars were received---and another 6,055 kilobars were shipped out.  The link to this action in troy ounces is here.

While on the subject of Hong Kong, Nick Laird has now obtained the official gold import data by China through Hong Kong during February---and during that month it was reported that 67.575 tonnes was imported.  This data was leaked to the main stream media about two weeks ago, but until Nick gets the actual data from the government website, he can't update his charts.  Now he has---and here it is.

While we're in this part of the world, the Shanghai Gold Exchange withdrew 40.003 tonnes, for the week ending April 3---and here's Nick Laird's updated chart.

Although I had no preconceived notions of what yesterday's Commitment of Traders Report was going to look like, I must admit that I was still shocked by the huge deterioration in gold.

In silver, the report was pretty neutral, as the Commercial net short position only increased by 577 contracts, or 2.9 million troy ounces.  The Commercial net short position now stands at 252 million troy ounces.

The Big 4 added something under 300 contracts to their current short position, the '5 through 8' large traders went short another 400 contracts---and the Commercial traders other than the Big 8 sold 1,300 long contracts.  Ted's estimate of JPMorgan's short side corner in the COMEX silver market last week was 18,000 contracts---and that was reconfirmed by the numbers in yesterday's companion Bank Participation Report, so he's been right on the money with that call throughout March.

Under the hood in the Disaggregated COT Report, it was mostly the technical funds in the Managed Money category on the losing side of the trade once again.  They sold 2,621 long contracts---and also decreased their short position by 1,771 contracts.

But the gold numbers were shocking, as the Commercial net short position blew out by a further 27,174 contracts, or 2.72 million troy ounces.  The Commercial net short position has now risen to 10.83 million troy ounces---and Ted says that we are now market neutral in gold, just like we are market neutral in silver from a COT perspective.

I have a 30-day gold chart below that shows what happened during the reporting week, but I want to get the rest of the gold numbers out of the way first.

Ted says that in response to last week's gold "rally," the Big 4 added 3,000 new short contracts---and the '5 through 8' Commercial traders added another 4,200 new short contracts---and the small traders, Ted's raptors, sold almost 20,000 long contracts for a profit.

All this happened in response to the technical funds in the Managed Money category, as they bought longs and sold shorts.  They added 8,939 long contracts---and decreased their short position by 10,680 contracts, for a total of 19,619 contracts.  The balance of the 27,174 contract change in Commercial net short position came from the small traders in the Nonreportable category.

Here's the 30-day gold chart.  The huge deterioration for the week came on April 1 through 6---Easter weekend---and JPMorgan et al were standing there sledgehammer in hand to make sure that the explosion in the gold price that would have occurred at that point never happened.  It was price management at its most ugly and crass---and exactly the same as what happened in silver a couple of weeks ago.

Before leaving the COT Report, here's the updated "Days of World Production to Cover COMEX Short Positions" using Tuesday's data.

And as I mention in my comments about silver in the Bank Participation Report below, it's my opinion that  between JPMorgan and Canada's Scotiabank, they are short about 90 days of world silver production between them,  That's about 90 percent of the short position held by the 4 largest traders---and about 60 percent of the 8 largest traders.  How's that for a concentrated short position?  And not a word out of the miners about it.

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

In gold, '3 or less' U.S. Banks were net short 29,595 gold contracts in the April BPR, compared to the 38,457 contracts they were net short in the March BPR.  I would guess that JPMorgan is  close to market neutral in gold, if they even hold a COMEX position at all, either long or short---and all of this short position is held by HSBC USA and Citigroup.

Also in gold, '19 or more' non-U.S. banks are net short 44,592 COMEX contracts, which is a slight improvement from the 51,151 COMEX contracts in the March Bank Participation Report.  It's my opinion that Canada's Scotia bank holds about a third of this short position all by itself, so the remaining 30,000-odd contracts spread out over the remaining '18 or more' non-U.S. banks are pretty much immaterial.

Here's Nick's chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank's COMEX gold positions [both long and short] were outed in October of 2012.

In silver, '3 or less' U.S. banks were net short 15,055 COMEX contracts in the April BPR.  That compares to the 13,499 COMEX contracts they were net short in the prior month.  Since Ted says that JPMorgan currently holds an 18,000 contract short-side corner in the COMEX silver market, that means that HSBC USA and Citigroup must be net long about 3,500 contracts to make the numbers work.

Also in silver, '15 or more' non-U.S. banks are net short 26,466 COMEX contracts in this month's report.  That compares to the 22,734 contracts these same banks were short in the prior BPR report.  Since October of 2012 when Scotiabank got outed, it's my firm belief that at least 80 percent of the above short position is held by Canada's Scotiabank---and the chart below confirms that.  This means that the short positions of the remaining '14 or more' non-U.S. banks are immaterial in the grand scheme of things.

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

I estimate that between JPMorgan and Scotiabank, they are currently net short about 39,000 COMEX silver contracts between them.

In platinum, '3 or less' U.S. banks are net short 6,648 COMEX contracts in the April BPR.  In the March BPR these same three banks were short only 5,226 contracts, so they've increased their net short position by 27 percent in just one month.

Also in platinum, '16 or more' non-U.S. banks are net short 9,132 COMEX contracts, up about 8 percent from the March BPR.  I would guess that maybe only one foreign bank has a material short position in platinum, so the rest don't matter.  But none of the non-U.S. banks matter in the face of the gargantuan short positions held by the '3 or less' U.S. banks.

Here's the BPR chart for platinum---and please note that the banks were never a factor in platinum until mid 2009.  Now look at them.  If you want to know why the platinum price isn't going anywhere, despite the supply/demand fundamentals, look at the total long positions the banks have vs. their collective short positions.  Palladium too!  That tells you all you need to know.  The banks are net short about 23 percent of the entire COMEX futures market in platinum.

In palladium, '3 or less' U.S. banks are net short 8,234 COMEX contracts.  This number has been virtually unchanged for the last six months.

Also in palladium, '11 or more' non-U.S. banks are net short 2,319 COMEX contracts, a decline of 25 percent from their net short position in the March BPR.  This number of contracts spread over 11 banks is immaterial when compared to the short positions in the '3 or less' U.S. banks.

Here's the BPR chart for palladium updated with the April report's data.  Just look at the long positions vs. the short positions held by the U.S. banks in Chart #5.  You couldn't make this stuff up!  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007---and they became the predominant and controlling factor by the end of Q1 of 2013, where they remain today.  I would bet that JPMorgan holds the vast majority of the U.S. banks' short position---and maybe all of it.  Platinum as well.  And how about silver?  And just as matter of interest, the banks, in total, are net short about 33 percent of the entire COMEX futures market in palladium, but it's the '3 or less' U.S. banks that are calling the shots in this metal---and the other three as well.

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

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

But they obviously aren't.

I've tried to cut back on the number of stories, but I have a huge number anyway---and I hope you find some that you think are worth your while.

 

¤ Critical Reads

VIX Closes at 5-Month Lows, BofA Warns Volatility Term Structure Is a "Significant Concern"

At 12.58, VIX closed today at its lowest level since December 4th 2014 (which makes perfect sense, given the forward-looking volatility implied by each and every macro data item and earnings release in the next month). However, as BofA notes, the VIX term structure (VXV / VIX) suggests "significant concern" about this advance in stocks being sustained.

Historically, the market has struggled to hold its gains when this ratio closes above 1.2.

This brief Zero Hedge article, with two must see embedded charts, appeared on their website at 5:50 p.m. EDT yesterday afternoon---and today's first story is courtesy of Dan Lazicki.

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U.S. import prices resume downward trend in March

U.S. import prices fell in March as rising petroleum costs were offset by declining prices for other goods, a sign of muted inflation that supports the view the Federal Reserve will probably not raise interest rates in June.

The Labor Department said on Friday import prices dropped 0.3 percent last month after a downwardly revised 0.2 percent gain in February.

Economists polled by Reuters had forecast import prices slipping 0.3 percent after a previously reported 0.4 percent increase in February, when prices advanced after declining for seven straight months.

In the 12 months through March, prices plunged 10.5 percent, the largest drop since September 2009.

This Reuters item, filed from Washington, showed up on their Internet site at 9:01 a.m. EDT yesterday morning---and it's the second offering in a row from Dan Lazicki.

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GE pares off financial unit and returns to industrial roots

General Electric is leaving the lending business, a major source of both profit and risk, as it continues to whittle its focus down to an industrial core.

The company said Friday that it will sell most of its GE Capital assets over the next two years, shedding businesses in a sector where it has had a tough time generating acceptable returns. GE also plans to repurchase as much as $50 billion of its own stock.

Shares of GE climbed to their highest price in almost two years Friday after the company announced the buybacks and the return to a simpler focus that investors have favored.

In addition to the GE Capital sale, the company will sell most of its GE Capital Real Estate to funds managed by the investment firm Blackstone. Wells Fargo will buy a portion of the loans at closing. The company plans to sell additional commercial real estate assets that will bring the total value of the deals to around $26.5 billion.

This business-related news item showed up on The Washington Post's website at 12:49 p.m. EDT yesterday afternoon---and I thank West Virginia reader Elliot Simon for digging it up for us.

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Stockman: America Stands Empty-Handed After 15 Years of a Reckless Fed

America has nothing to show for 15 years of ultra-easy monetary policy and a Federal Reserve that has been allowed to run amok with the nation's future, according to David Stockman, White House budget chief in the Reagan administration.

Stockman ticked off a list of conspicuous central bank actions and largesse from Washington over the past decade and a half. The items included a $700 billion Troubled Asset Relief Program (TARP), $800 billion of fiscal stimulus, about $4 trillion of money printing and 165 months of artificial rock-bottom interest rates.

"You'd think with all that help from Washington that American capitalism would be booming with prosperity," he wrote on his Contra Corner blog. "On the measures which count when it comes to sustainable growth and real wealth creation, the trends are slipping backwards — not leaping higher."

This commentary by David Stockman appeared in a story over at the newsmax.com Internet site early on Thursday morning EDT---and it's the first offering of the day from Roy Stephens.

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Mark Zuckerberg vs. Barack Obama: guess who’s winning?

Yet despite all the fanfare for the big bosses who are in attendance, so far it’s been Mark Zuckerberg who has stolen the show.

Yesterday the Facebook co-founder announced that, through his Internet.org foundation, he would provide free Internet access across Panama.

He’s already been doing it successfully in Colombia and several African nations.

It’s a sign of the times that a room full of politicians can’t even begin to accomplish a tiny fraction of what a single individual in the private sector can do.

What’s more, Zuckerberg’s pledge really shows how much the world is changing.

I don't normally post anything from Simon Black's website, but I thought this article on his sovereignman.com Internet site yesterday was worth reading.

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How Wall Street captured Washington’s effort to rein in banks

In the aftermath of the 2008 financial crisis, Keith Higgins was certain: Banks weren’t to blame.

Higgins, a top attorney at prominent law firm Ropes & Gray LLP, was chairman of an American Bar Association committee on securities regulation. As such, he lobbied strenuously against a rule U.S. regulators were drafting that would require banks to disclose a lot more about asset-backed securities like those that had just torpedoed the economy.

In letters to the Securities and Exchange Commission, Higgins argued that divulging more details about the mortgages and other financial products that go into such securities would only confuse investors. And it was investors, with “insufficient understanding and … commitment” to their investments, who had been the real cause of the crisis, he argued in a July 2008 letter.

Then, in May 2013, as the SEC was still hashing out the rule, Higgins was tapped to lead the very 500-person SEC division that was writing it.

This longish essay, filed from New York, appeared on the Reuters website at 2:30 p.m. EDT on Tuesday afternoon---and it's the first of three stories in today's column that came from yesterday's edition of the King Report.

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Doug Noland: A Tale of Two Entangled Super Bubbles

Late-stage speculative runs are often fueled by short squeezes. As deteriorating fundamentals and underlying vulnerability begin to manifest, short positions and bearish derivative bets are initiated as both directional speculations and market hedges. At the same time, prolonged bullish cycles ensure upside momentum and general “bullish” inertia. Blow-off tops can be the result of a confluence of policy measures to ward off collapse and an expansive pool of speculative finance that has profited greatly from gaming policy.

There’s understandable skepticism that Chinese authorities can hold their increasingly unwieldy Bubble together. Add a stock market Bubble to their already lengthy list of problems. Still, reserves of $3.8 TN are a lot of “money.” But how much is needed to sustain the aged Chinese Bubble, it’s U.S. counterpart and, perhaps more pertinent at the moment, a faltering global EM and commodities Bubble. In the midst of all the bullish hoopla, it’s worth noting king dollar caught a strong bid this week. One of these days, the Super Currency Peg binding the two Super adversaries and their Super Bubbles will need to be disentangled.

Doug's must read commentary, at least for me, was posted on his website early yesterday evening---and I thank reader U.D. for sending it along.

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Notes on the Currency War - 'Old as Babylon and Evil as Hell'

Below is an excerpt from a much longer article which you can read in its entirety here.

It is an interpretation told from a certain perspective, but overall does a fairly decent job of laying out the general boundaries for the currency war that has been brewing in the background since 1971 with the collapse of Bretton Woods.

It is more visible to us now because it started manifesting more overtly in the 1990's and since then has slowly been gaining momentum.

If an analyst does not understand this, is not aware of it even if they do not agree with this particular interpretation, then they have a poor grasp of the major trends that are driving so much financial and political activity in the world today.

And fortunately or unfortunately, gold and silver are deeply involved as the traditional supra-national world currencies.

This must read article appeared on jessescrossroadscafe.blogspot.ca Internet site on Thursday---and had to wait for a spot in today's column.  And if you read the "much longer" version mentioned in the first paragraph, I want you to know that I disagree vehemently with the contents of the final paragraph.  I thank South African reader B.V. for sharing it with us.

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One Last Look at the Real Economy Before It Implodes - Part 4

We are talking about the REAL economy in this series; and in the real economy, no nation with a central bank actually “breaks” from the New World Order. In fact, all conflicts between the East and West are only serving to further the cause of globalists and Fabian socialists.

China alone does not have the capacity to replace the U.S. as a primary driver for the global economy, nor does the Yuan have the capacity to replace the dollar as a world reserve currency. However, this is not China’s goal. It never has been China’s goal. China’s only purpose in its historic fiscal expansion has been to achieve inclusion in what the IMF calls the “global economic reset.” Part of this reset is the introduction of the IMF global currency basket system, or Special Drawing Rights (SDR), as a kind of centralized control mechanism for all currencies around the world. The IMF and China have continuously called for the SDR basket system to replace the U.S. dollar as the world reserve currency.

I covered this developing scheme in great detail in my article 'The Economic End Game Explained'.

Despite the hopes of some alternative writers that China will somehow break the chains of the central banking monopoly, every Chinese action since at least 2008 has been in preparation to become a full slave nation under the control of IMF policy. China has now officially submitted its currency (the Yuan) for inclusion as a reserve currency in the SDR basket.  China's central bank has openly called for the IMF to take a dominant role in the management of the world's currencies through the SDR basket system.

This longish, but very interesting commentary appeared on the Zero Hedge Internet site at 6:40 p.m. EDT yesterday evening---and in my opinion, it's worth reading.  I thank Dan Lazicki for sending it our way.  It sounds very much like what's contained within the covers of G. Edward Griffin's book "The Creature From Jekyll Island:  A Second Look at the Federal Reserve"

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Drought and the Failure of Big Government in California

California Governor Jerry Brown has announced that private citizens and small businesses — among others — will have their water usage restricted, monitored, and subject to heavy fines if state agents determine that too much water has been used. Noticeably absent from the list of those subject to restrictions are the largest users of water, the farmers.

Agriculture accounts for 80 percent of the state’s water consumption, but 2 percent of the state’s economy. To spell it out a little more clearly: Under Jerry’s Brown water plan, it’s fine to use a gallon of subsidized water to grow a single almond in a desert, but if you take a shower that’s too long, prepare to be fined up to $500 per day.

The fact that the growers, who remain a powerful interest group in California, happen to be exempt from water restrictions reminds us that water is not allocated according to any functional market system, but is allocated through political means by politicians and government agents.

When pressed as to why the farmers got a free pass, Jerry Brown was quick to fall back on the old standbys: California farms are important to the economy, and California farms produce a lot of food. Thus, the rules don’t apply to them. If translated from politico-speak, however, what Brown really said was this: “I have unilaterally decided that agriculture is more important than other industries and consumers in California, including industries and households that may use water much more efficiently, and which may be willing to pay much more for water.”

This very interesting commentary appeared on the mises.org Internet site on Friday sometime---and it's worth reading if you have the interest.  It's another contribution from Dan L.

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Dust Bowl 2.0: California's Historic Drought About to Get Even Worse as "Snowpack Melts Early Across the West"

It has been a bad year for California whose drought is rapidly approaching historic proportions: according to the LA Times, which cites climatologist Michael Anderson, "you’re looking on numbers that are right on par with what was the Dust Bowl."

It is about to get even worse. According to the USDA, the west-wide snow pack is melting earlier than usual, according to data from the fourth 2015 forecast by the United States Department of Agriculture's Natural Resources Conservation Service (NRCS).

"Almost all of the West Coast continues to have record low snow pack," NRCS Hydrologist David Garen said. "March was warm and dry in most of the West; as a result, snow is melting earlier than usual."

It is only fitting that while economists blame a "overly cold winter" for sliding GDP, weathermen blame an overly warm winter for the California's historic drought.

This is another very interesting article on the same drought subject as the one posted above---and it's also courtesy of Dan Lazicki.

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Canada to send troops to Ukraine - media

The Canadian government intends to send troops to Ukraine in the coming months, CTV television channel reported on Friday. According to a government source, the military will not be engaged in military operations.

According to the TV channel website, CTV's Mercedes Stephenson reported the news Friday on Power Play. "While the government is still working out the details, sources tell CTV News a training mission is one of the options on the table. Canada will likely work closely with American allies who are already in the region," Stephenson said.

Stephenson said senior Conservatives have been hinting at the possibility of an expanded mission for weeks, and the move will emphasise "Canada's strong anti-Putin stance and help shore up the Ukrainian government."

According to CTV, the ruling Conservative Party may put this question to the national parliament debate soon. The dispatch of the Canadian troops to Ukraine will be explained as support for "Ukraine's sovereignty and territorial integrity."

I apologize to all readers for this despicable act, if it is approved.  Harper has trashed Canada's image as a peacemaker---and thrown his lot in with the War Party in Washington.  Shame on him.  This tiny article showed up on the tass.ru Internet site at 4:36 a.m. Moscow time on their Saturday morning, which was 9:36 p.m. Friday evening Ottawa time.

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Gilts strike as foreigners shun U.K. on gridlock fears

Foreign investors are slashing holdings of British gilts at a record pace on concerns over electoral gridlock and the long-term stability of sterling.

Data from the Debt Management Office show that non-residents sold a net £14bn of gilts over the two months of January and February, an even bigger sell-off than during the white heat of the financial crisis in early 2009.

The bid-to-cover ratio at gilt auctions has been slipping relentlessly across all maturities for the past nine months, dropping to a six-year low of 1.19 at a sale of five-year debt on Wednesday.

“The data suggest some kind of buyers’ strike,” said Andy Chaytor, head of European interest rates strategy at Nomura. “This is entirely consistent with the idea that non-residents may wish to reduce gilt holdings in the face of a very uncertain election.”

This commentary by Ambrose Evans-Pritchard showed up on The Telegraph's website at 6:30 p.m. BST on Thursday evening---and I thank Roy Stephens for sliding it into my in-box in the wee hours of Saturday morning.

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Deutsche Bank nears plea deal over Libor manipulation

A long-running investigation into Wall Street's manipulation of interest rates is heading into a stark final chapter as authorities around the globe push Deutsche Bank to pay a record penalty and accept a criminal guilty plea for the unit at the center of the case.

Deutsche Bank, Germany's largest financial institution and one of several banks linked to the gaming of interest rates, is in talks to resolve the case as soon as this month, according to people briefed on the matter. A deal -- which involves federal prosecutors as well as New York State's financial regulator and regulators in London and Washington -- would be one of the last cases to arise from the sweeping investigation into the London interbank offered rate, or Libor.

The contours of Deutsche Bank's planned settlement, described by the people briefed on the matter who were not authorized to speak publicly, show the perils of going last. Collectively, the authorities are expected to collect more than $1.5 billion from Deutsche Bank, eclipsing all past settlements with banks accused of Libor manipulations. The Justice Department also conditioned the deal on one of the bank's British subsidiaries pleading guilty to fraud, in what would be the most significant banking unit to accept a criminal plea in the Libor investigation.

This article was posted on The New York Times website on Thursday sometime---and I found it embedded in a GATA release early yesterday morning.

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Russia and Greece to ink Turkish Stream gas pipeline deal within days - Greek minister

Russia and Greece are to sign a memorandum of cooperation on the construction of a new pipeline in the Turkish Stream project which will deliver Russian gas to Europe via Greece, according to the Greek energy minister.

The memorandum is expected to be signed in the next few days, Greek Energy Minister Panagiotis Lafazanis said in an interview with the Sputnik news agency, adding that the pipeline would be not only a route between Greece and Russia but would as well be very important for Europe.

“The visit of the government delegation, the meeting of Tsipras and Putin open the way for the pipeline which will begin at the border with Turkey and end at the border with Macedonia in the direction of Central Europe. This pipeline is extremely important for energy security and cooperation in Europe," Lafazanis said.

This story put in an appearance on the Russia Today website at 5:17 p.m. Moscow time on their Friday afternoon---and it's courtesy of Roy Stephens.

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Default in Ukraine ‘virtual certainty’: S&P cuts foreign currency rating to ‘CC’

Standard & Poor’s has downgraded Ukraine’s long-term foreign currency sovereign credit rating to CC, a notch lower than the previous CCC- level. A default on Ukraine’s foreign-currency debt is a "a virtual certainty," according to the agency.

The ratings agency has said that the outlook remains negative. Ukraine's foreign currency rating is the world's second worst, behind Argentina which has a rating of 'SD'. It is still ahead of Venezuela, which S&P has assigned a 'CCC' rating.

“The negative outlook reflects the deteriorating macroeconomic environment and growing pressure on the financial sector, as well as our view that default on Ukraine’s foreign currency debt is virtually inevitable," the ratings agency said in a statement.

This news item showed up on the Russia Today website at 4:08 p.m. Moscow time on their Friday afternoon---and I thank Jim Skinner for finding it for us.

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John Batchelor Interviews Stephen F. Cohen

This 39:46 minute audio interview regarding the Ukraine and the Minsk 2 treaty, showed up on the johnbatchelorshow.com Internet site on Tuesday---and for length and content reasons, it had to wait for Saturday's column.  I thank Larry Galearis for bringing it to our attention.

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Punishing Putin: E.U. Leaders Snub Moscow World War II Commemorations

This Monday, Russia President Vladimir Putin visited the cemetery in the village of Marfino, not far from the old western Russian city of Staraya Russa, where he placed a bouquet of red roses. Then he met with veterans of the "Great Patriotic War," the term Russians use to describe their battle against Hitler.

It would be hard to find another part of Russia that is as saturated with the blood of that war than the earth around Staraya Russa. Officially, 850,000 soldiers died there during the two-and-a-half-year German occupation. The real figure is probably higher, because the Red Army long attempted, albeit unsuccessfully, to fend off repeated attacks by the enemy along the northwestern front.

The encounter near Marfino was one of the events with which the Russian president is preparing his country for May 9, which marks the anniversary of the end of the war with Hitler's Germany. It is "our country's most important and most honest holiday," Putin said in Staraya Russa. "It is the day of the great victory."

The end of the war will be commemorated in Russia for the 70th time this year. Since it was declared an official holiday in 1965, May 9, with its spontaneous gatherings of veterans in the streets, public festivals and gun salutes in the evening, has in fact become Russia's most moving holiday -- and perhaps the only one that has truly united the people. The victory over Hitler happened three generations ago. Still, during Putin's visit to Staraya Russa, the veterans reminded him of the words of military commander Alexander Suvorov, who said that a war is not over "until the last soldier has been buried." Last year, search teams recovered the remains of 12,900 fallen soldiers from swamps near Novgorod, the forests of Smolensk and the region around St. Petersburg.

This essay was posted on the German website spiegel.de at 6:35 p.m. Europe time on their Friday evening---and it's definitely worth reading.  I thank Roy Stephens for digging it up for us.

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NATO War Propaganda: A Danger to World Peace

The reaction of the media in the NATO countries to the murder of Boris Nemtsov reveals the next phase of the war against Russia. Defeated at Debaltsevo, defied by Russia, lectured by China, the NATO warlords need something immediate and dramatic to guide the imaginations of their peoples towards war. The constant propaganda offensive aimed at Russia is accelerating and is increasingly designed to identify Russia and its people not with the Russian government, but with a single man and, with the murder of Nemtsov, that man is now labelled assassin.

Across the broad spectrum of the “western” media in the past days there has appeared one story after another designed to make the average citizen believe that President Putin was personally involved in the killing. The facts of the case do not matter. The NATO governments deny any involvement in a provocation but their immediate denunciations, the morning following the murder, of Russian democracy, of Russian government, and of President Putin, convict them all on the charge of exploiting the murder as surely as if the assassins’ bullets were theirs.

The labelling of resisting leaders as criminals has been used frequently in the west since the days of the Roman Empire and once a foreign leader is so labelled a war soon follows. In recent history the Americans and their NATO lieutenants identified President Milosevic as a criminal for simply refusing NATO's diktats. They did the same with Saddam Hussein, with Muammar Gaddafi and murdered them all, one way or another.

Once a head of state is demeaned in this way and reduced to a common criminal the people of the aggressor country are easily persuaded that his elimination, and the elimination of the government that supports him, is a necessary task. The persuasion has been going on since Putin’s speech in 2007, which drew a line in the sand against American imperial ambitions in Eurasia, and reached new levels of hysteria when Flight MH17 was shot down last year. Evidence that it was probably the Kiev forces that committed the crime, with American collusion, was completely suppressed by the western media and when more evidence of their culpability was produced the shoot down was erased from history and now is rarely mentioned. Since the overthrow of the legitimate government of Ukraine a year ago the western media have been caught time and again repeating US propaganda about Russian threats to peace in Europe, about Russian territorial ambitions and Russian regular army units being involved in the Donbass. Denials by Russia, and even observers of the OSCE, are ignored and the lies are repeated day after day after day

This short essay got "lost" in my in-box for three weeks---and I finally rescued it yesterday.  It's from mid-March, but is just as relevant today as it was back then, if not more so---and it's a must read for any serious student of the New Great Game.  I thank Roy Stephens for sending it.

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Iranian Supreme Leader Refrains From Endorsing Nuclear Deal

Iranian Supreme Leader Ayatollah Ali Khamenei refrained from endorsing a framework nuclear deal agreed with world powers and said all sanctions must be lifted once a final accord is reached.

In his first public comments addressing the April 2 pact that was outlined in Lausanne, Switzerland, Khamenei said on Thursday he was “neither for it, nor against it.” Envoys from the U.S., U.K., France, Russia, China, Germany and Iran have given themselves until June 30 to reach a permanent deal.

His insistence on an immediate end to sanctions clashes with U.S. demands to link the relief to Iran’s implementation of a final accord. Earlier, President Hassan Rouhani said Iran “will not sign a deal unless on the very first day of its implementation all economic sanctions” are removed, driving oil prices higher.

This Bloomberg article appeared on their Internet site at 5:06 a.m. Denver time on Thursday morning---and I found it in yesterday's edition of the King Report.

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OPEC is at risk of falling apart

OPEC has been the most talked about international organization among investors, analysts and international political lobbies in the last few months.

When OPEC speaks, the world listens in rapt attention as it accounts for nearly 40 % of the world’s total crude output.

With its headquarters in Vienna, Austria, one of the mandates of 12-member OPEC is to "ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry."

How's that working out so far, you might ask? This interesting article was posted on the businessinsider.com Internet site at 6:37 p.m. EDT on Friday evening---and I thank Roy Stephens for sharing it with us.

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U.S. bans Intel from sending computer chips to China amid nuclear research fears

A Chinese supercomputer ranked fastest in the world four years running could soon slip from that top spot: Intel, the US-based microprocessor maker, says it’s been blocked by the US government from selling chips to China.

Representatives for Intel Corp. confirmed to The Wall Street Journal this week that it’s stopped shipping microprocessor chips to Chinese customers after the US Department of Commerce announced recently with little fanfare that its begun restricting exports to certain entities there over national security concerns. According to the Commerce Dept., the chips are powering high-speed supercomputers being used to conduct nuclear research on behalf of the Chinese government.

A Commerce Dept. committee added the names of four Beijing-linked entities to its block list in February, the Journal first reported on Thursday this week, all believed to be “involved in activities contrary to the national security and foreign policy interests of the United States.”

This very interesting news item appeared on the Russia Today website at 5:18 p.m. Moscow time Friday afternoon, which was 10:18 a.m. in Washington.  It's the final offering of the day from Roy Stephens, for which I thank him.

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Sprott Money Weekly Wrap Up with Eric Sprott

Listen to Eric share his views on the economy, the effect of the Asian Infrastructure Investment Bank on the U.S. dollar, banking turmoil---and the potential of bail-ins---and the movement of gold this week.

This 14:02 minute audio interview, which was conducted by Sprott Money's Geoff Rutherford, was posted on the sprottmoney.com Internet site on Friday.

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Dimon says no doubt about it: Bear Stearns was a bad idea

Jamie Dimon got Bear Stearns for a bargain price — and he says he’s still paying for it.

Seven years after the financial crisis, the JPMorgan Chase boss now says he totally regrets buying the teetering Wall Street firm — at the urging of the government — for a steep discount.

Roughly 70 percent of JPMorgan’s $19 billion of mortgage-related legal bills stems from the acquisition of Bear Stearns and another faltering firm, Washington Mutual, during the financial crisis, according to Dimon.

“In case you were wondering: No, we would not do something like Bear Stearns again — in fact, I don’t think our Board would let me take the call,” he wrote in his latest annual letter to shareholders.

And just wait till he gets the bill for covering their obscene and outrageous short position in silver that he inherited---and that I discussed at length in my comments in the Bank Participation Report---unless, of course, he's covered by the Fed and the Treasury with his "get out of jail free" card.  This article appeared on The New York Post website at noon EDT on Thursday.  A far more pithy version version of this story, headlined "Jamie Dimon Just Wants To Remind Everyone That Buying Bear Was One Of The Worst Decisions Ever Made In Modern Banking", is linked here---and it came from yesterdays edition of the King Report as well.

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Good Entry Point For Gold Right Now – Marc Faber

“My sense is that we’ve been at $1,921 on the gold price in September 2011, we’re now around $1,200. Well, I think this is a reasonably good entry point,” said Marc Faber, editor and publisher of the Gloom Boom & Doom Report, told Kitco News in a phone interview.

“I’m still buying gold… I buy some every month and whenever there is a more significant decline, I add more to my gold position,” he added.

“I believe one day this faith in paper money and in the power of central bankers will be undone and at that stage price of metals – in physical form – will perform very well,” he added.

This gold-related news item appeared on the kitco.com Internet site on Tuesday afternoon EDT---and there's also the audio interview to go along with the above transcript.  If you're interested in listening to the man himself, the link to the 7:42 minute audio clip is here.  I thank Ken Hurt for both of these.

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Gold Surges 3.5% in Euro and 2.2% in Pounds This Week

Euro gold prices jumped towards their second-best weekly close in two years Friday, rising 3.9% from before Easter as the single currency sank and spot gold jumped back above $1200 per ounce in Dollar terms.

Erasing an earlier dip, "Precious metals [made a] sharp reversal despite stronger USD," says one London bullion bank's trading desk, calling it a "bullish sign".

"[There's] a growing consensus that rates will remain easy for the near-term, and less of a threat for gold," says a note from Japanese trading house Mitsui Global Precious Metals' team in Hong Kong.

Of course when the euro heads higher---and the U.S. dollar heads lower, all of this will reverse.  This article appeared on the bullionvault.com Internet site on Friday afternoon BST---and I found it on the Sharps Pixley website.  You'll note that there's been a headline change, as the article title now reads "Euro Gold Jumps Near 2-Year High, Halves 2013 Plunge as Currency Sinks with Sterling, Global Equities Jump".

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India's rich temples may open gold vaults for Prime Minister Modi

India is the world's biggest consumer of gold and its ancient temples have collected billions of dollars in jewelry, bars and coins over the centuries -- all hidden securely in vaults, some ancient and some modern.

A few years ago a treasure of gold worth an estimated $20 billion was discovered in secret subterranean vaults in the Sree Padmanabha Swamy temple in Kerala state.

Now Prime Minister Narendra Modi wants to get his hands on this temple gold, estimated at about 3,000 tonnes, more than two thirds of the gold held in the U.S bullion depository at Fort Knox, Kentucky, to help tackle India's chronic trade imbalance. Modi's government is planning to launch a scheme in May that would encourage temples to deposit their gold with banks in return for interest payments.

The government would melt the gold and loan it to jewelers to meet an insatiable appetite for gold and reduce economically-crippling gold imports, which accounted for 28 percent of India's trade deficit in the year ending March 2013.

This absolute must read Reuters article, co-filed from Mumbai and New Delhi, showed up on their Internet site at 5:04 p.m. EDT on Thursday afternoon---and I found it on the gata.org Internet site.

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India's gold imports hit 125 tonnes in March

India's gold imports more than doubled to 125 tonnes in March from 60 tonnes in the same period a year ago, three TV channels reported on Friday.

Gold imports in the fiscal year 2014/15 ended March 31 jumped to 900 tonnes, up 36 percent from a year ago, the TV reports showed.

Gold imports by the world's top consumer surged in March due to a key Hindu festival Akshay Tritiya, when it is considered auspicious to buy gold, and the ongoing wedding season when demand for jewellery typically spikes, Rahul Gupta, director, P.P. Jewellers told Reuters.

That's all there is to this tiny Reuters article that showed up on their Internet site at 6:19 p.m. IST on their Friday evening---and the photo is worth the trip.

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Pan American’s plush dividend at risk

Analysts increasingly see Pan American Silver’s plush dividend as imperilling the silver miner’s balance sheet at current metal prices.

TD Securities analyst Daniel Earle recently dropped his near-term price target for Pan American from $2 to $11.50 in a note highlighting dividend risk given he expects the miner to have negative free cash flow this year at recent silver prices.

Earle rates Pan American a hold with the major silver miner trading under $10/share in recent weeks.

Under the header “At current metal prices dividend may be in jeopardy”, Earle argued that while Pan American’s balance sheet was strong, with $330 million in cash and equivalents along with no debt, its cash flow situation was poor.

Of course the people running this organization would rather see the company go under than lift a finger to help themselves and their stockholders by going after the cause of these low silver prices---and that would be JPMorgan and Scotiabank.  That goes for every other silver miner as well.

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¤ The Funnies

First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates five producing silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada Silver Mine, the La Guitarra Silver Mine, and the Del Toro Silver Mine. Production from these five mines is anticipated to be between 11.8 to 13.2 million ounces of pure silver or 15.3 to 17.1 million ounces of silver equivalents in 2015.

 

¤ The Wrap

Aside from the massive 7.5 million ounce of silver that JPMorgan acquired in the March delivery month, the key difference between its acquisition of silver and the Hunt Bros. or Buffett’s acquisitions, is that JPMorgan was the largest paper short seller on the COMEX over the time of its physical accumulation. This is manipulation on its face and just today [Wednesday] the federal commodity regulator, the CFTC, brought charges against Kraft for manipulating wheat futures in the same manner as I allege JPMorgan has used in acquiring silver at depressed prices.

JPMorgan is now in position to reap a fortune on sharply higher silver prices and that is almost tantamount to a personal invitation to investors to join in and reap a fortune as well by buying silver. When what is arguably the most powerful and well-connected financial institution in the world sets itself up for a score on the upside by buying more of something than ever bought before, that is an invitation to all investors to buy silver. Of course, JPMorgan is not intending to encourage you to buy silver due to their own actions; that’s just an unintended consequence.

Still, JPMorgan has been in the driver’s seat for silver for more than seven years (since acquiring Bear Stearns) and the unmistakable evidence that they have acquired a truly massive position in physical silver points to the bank driving silver prices higher. That’s as close to an insider investment invitation as it gets. - Silver analyst Ted Butler: 08 April 2015

Today's pop 'blast from the past' is is 38 years old already!  How the #@$% is that possible!!!  Where the hell has the time gone---and I really mean it this time?  The song and the group need no introduction---and the link is here.

Today's classical 'blast from the past' is a short work by Johannes Brahms, his Hungarian Dance No. 5---and everyone and his dog has heard this piece in one form or another in their lives.  Here is, fittingly, the Hungarian Symphony Orchestra doing the honours.  The quality of the video and audio is world class, so put it on all full screen and enjoy!  The link is here.  Here's the same piece played on the glass harp---and in some ways it's even more incredible than the orchestral version.  The link to that is here.

I was happy to see the rallies in all four precious metals yesterday, especially considering the strength in the dollar index.  It's a clear sign that these metals want to fly if given the opportunity---and regardless of what the dollar is doing as well.

The only thing keeping precious metal prices in check, are the efforts of the sellers of last resort, JPMorgan et al, just like they were on either side of the Easter long weekend.  Precious metal prices would have exploded to the upside, regardless of what the currencies were doing---and as the current COT Report showed, "da boyz" were standing there with the proverbial sledgehammer.

Here are the 6-month charts for all four precious metals---and you can see that yesterday's rallies were capped at, or just below, all of their respective 50-day moving averages.  If JPMorgan et al hadn't shown up with the lumber at the London p.m. gold fix, precious metal prices would be well beyond these moving averages at the moment.

Just as the American government sends in the warplanes and the Tomahawk cruise missiles, or the drones replete with their respective munitions, the U.S. dollar, the price of gold, silver and the other precious metals are just other weapons in the arsenal of the Anglo/American empire.

These financial weapons have their own delivery systems in the U.S.  They would include the Treasury Department, The Exchange Stabilization Fund, JPMorgan, HSBC USA---and Citigroup.  I'm sure I've left some out.  Sometimes they contract out to the Canadian, British, or Germany banking systems, but it's all run by New York and Washington.

Both Russia and China could put an end to all of this---and as I've said on several occasions in the past, they may do exactly that if push becomes shove.

Will it end?  Yes, of course, all price management schemes end at some point---and if you've spent any time reading stories in the Critical Reads section above, you've probably already figured that the end will come quickly, but probably loaded with uncertainty, along with some of Jim Rickard chaos thrown in for good measure.

I'm not exactly sure how it will all end, either.  But the invitation by JPMorgan to load the boat with physical silver is something that should be considered by all serious investors.

As the title to Thursday's column stated, the "Big Reset" is coming---and five minutes after that happens, it will be far to late to make any changes---so best do it now, whatever you plan to do.

That's all I have for the day---and the week---which is more than enough.

See you on Tuesday.

Ed Steer