Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

The gold price weakened a bit in Far East and early London trading on their Friday, with the low tick coming shortly after 11 a.m. BST.  It traded flat for a couple of hours---and began to rally shortly before the COMEX open.  And like what happened on Wednesday and Thursday, the price got stepped on shortly after the London p.m. gold fix.  The high tick of the day, such as it was, occurred minutes after the 1:30 p.m. EDT close---and the price didn't do much after that.

The low and high ticks were reported by the CME Group as $1,210.60 spot and $1,225.80 spot in the June contract.

Gold finished the Friday session at $1,223.50 spot, up $2.10 from Thursday's close.  Net volume was fairly decent at 117,000 contracts.

As is almost always the case, the silver price traded in lock step with gold, complete with the tap-down in price shortly after the London p.m. gold fix was in.

The low and high ticks were recorded as $17.205 and $17.585 in the July contract.

Silver closed yesterday at $17.495 spot, up a nickel on the day.  Net volume was very chunky at 45,500 contracts.

Ditto for platinum, which finished the Friday session at $1,166 spot, up 9 bucks from Thursday's close.  You'll note that the rally in that metal was stopped cold minutes after the London p.m. gold fix as well.

The palladium price didn't do a thing until 9 a.m. in New York---and then away it went to the upside.  The spike high at 1 p.m. EDT got hammered flat---and it traded sideways from there.  Palladium finished the day at $791 spot, up 11 dollars.

The dollar index closed very late on Thursday afternoon in New York at 93.39---and except for a 20 basis point up/down spike in the two hours proceeding the London open, it didn't do a thing in Far East trading on their Friday.  But the London trading session was another story.  It rallied from 93.39 up to its 94.00 high by 8 a.m. in New York---and hung in there for exactly one hour before heading lower.  Most of the decline was in minutes before London closed at 11 a.m. EDT---and it chopped slightly lower from there.  The 93.14 low tick came at 3 p.m. in New York.  The index finished down 13 basis points at 93.26---but had one hell of an intraday ride.

Of course the precious metals were trading [or were allowed to trade] like none of these currency machinations were going on at all.

Here's the 1-year dollar chart just so you can keep track of the longer term.

The gold stocks opened down, but quickly rallied into positive territory by the p.m. gold fix.  Their highs came at gold's high, which was moments after the 1:30 p.m. COMEX close---and from there they slid back into the red---as the HUI finished down 0.56 percent, its second losing session in a row.  I mentioned in yesterday's column that I was "underwhelmed" by Thursday's HUI action---and I was alarmed by yesterday's close.

The silver equities followed a similar price path, but didn't finish in negative territory after the COMEX close---and Nick Laird's Intraday Silver Sentiment Index closed up 0.11 percent, which was basically unchanged.

Nick mentioned that gold was up 3 percent on the week---and silver was up 6.7 percent.  The HUI closed up 3 percent as well---and the Intraday Silver Sentiment Index finished higher by only 8.8 percent.  So far this precious metal rally has not impressed me.

The CME Daily Delivery Report showed that zero gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  JPMorgan stopped one of them for its own in-house account.

The CME Preliminary Report for the Friday trading session showed that gold open interest in May was unchanged at 141 contracts---and silver's May o.i. fell by 4 contracts to 340.

There were no reported changes in GLD yesterday, but much to my amazement, another 1,624,968 troy ounces were withdrawn from SLV.  Ted Butler said that it's obvious what has been happening over the last few days as these big withdrawals continue---and that is a large entity with very deep pockets is buying SLV shares and redeeming them immediately for physical metal.  Ditto for gold so far this month as well.

Since April 27 there has been over 11.5 million troy ounces of silver withdrawn from SLV.

Yesterday [May 15] was the cut-off for the the mid-month short position report for the folks over at shortsqueeze.com and, without doubt, there will be big increases in the short position in both GLD and SLV, as no metal has been deposited all week---and after the rallies we've seen since Wednesday, both are owed decent amounts.  Unfortunately, we won't see that report for about ten days---but when the numbers are posted, I'll have them for you.

For the fourth day in a row there was no sales report from the U.S. Mint.  The one we get on Monday should be impressive, especially in silver eagles.

Month-to-date the mint has sold 8,000 troy ounces of gold eagles---3,500 one-ounce 24K gold buffaloes---and 1,058,500 silver eagles.  The silver/gold sales ratio based on these numbers works out to 92 to 1.

Thursday was another day where there was little in/out activity in gold and silver at the COMEX-approved depositories.  In gold, only 4,032 troy ounces were received---and 16 kilobars [514.400 troy ounces] were shipped out.  In silver, there was 7,971 troy ounces received---and 100,990 ounces shipped out the door.  Most of the 'out' activity was at Canada's Scotiabank.

It was quite a bit busier at the COMEX-approved gold kilobar warehouses in Hong Kong on their Thursday, as 6,816 kilobars were received---and 5,275 kilobars were shipped out.  The link to that activity in troy ounces is here.

As I mentioned in yesterday's column, Friday's Commitment of Traders Report for positions held as of the close of trading on Tuesday, was already "yesterday's news" before it was posted on the CFTC's website on Friday afternoon.

In a nutshell, the Commercial net short positions in both gold and silver increased by small amounts.  In silver it was 853 contracts, or 4.27 million troy ounces---and in gold it was 3,340 contracts, or 381,100 troy ounces of the stuff.

Under the hood in the Disaggregated COT Report, it was almost all the technical funds in the Managed Money category covering shorts and going long---and JPMorgan et al in the Commercial category doing the opposite.  Not a gold or silver producer, or end user of these products in sight.

Ted mentioned that the Big 4 traders in silver increased their net short position by 1,200 contracts, but he's rather reluctant to pin it all of JPMorgan at the moment---and will probably reserve judgement until next Friday's COT Report.

Of course, once the cut-off for Friday's COT Report was past on Tuesday, the price fireworks really started---and none of that big price action is in this latest report.  That will be hidden until next Friday's report.  And as I said yesterday---and many times over the past ten years---the fact that all this happened after Tuesday's cut-off was no accident.  It has occurred countless times in the past when "da boyz" want to hide what they're doing from the public's prying eyes for as long as possible.

Here's Nick's now-famous "Days of World Production to Cover COMEX Short Positions" for the Big 4 and Big 8 short holders for all physical commodities updated with yesterday's COT data.

Nick Laird was kind enough to send around the chart showing the withdrawals from the Shanghai Gold Exchange for the week ending May 7---and it showed that 37.093 tonnes were taken out during that reporting week.  In his covering e-mail Nick made mention of the fact that "The weekly average withdrawal since the start of 2013 is 43.405 tonnes."

I'm happy to report that I don't have all that many stories for you today---but I do have a decent number that I've been saving for today's column, so I hope you can find the time for them.

 

¤ Critical Reads

Someone is Lying: Job Optimism Plummets to Levels Unseen Since Financial Crisis

The percentage of respondents to University of Michigan's Consumer Sentiment Survey that "think they (or their spouse) will lose their job over the next 5 years" soared to its highest since March 2009.

Either the BLS' workers are lying, or the government's data on jobs is 'misleading'

This brief Zero Hedge article appeared on their Internet site at 10:21 a.m. EDT Friday morning---and the two embedded charts are worth a look.  I thank reader M.A. for today's first story.

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U.S. Industrial Production Weakens For 5th Month - Longest Streak Since Great Recession

On the heels of the weakest print since May 2009 in March, April Industrial Production printed -0.3% (against expectations of a bounce to -0.03% from -0.64% - which was revised higher). This is the 5th monthly drop in a row - the longest streak since the Great Recession.

This is the 2nd weakest YoY print, at a mere +1.93%, since Feb 2010. To add to the pain, Capacity Utilization missed expectations falling to its lowest since Jan 2014 (falling the most YoY since Dec 2009) and Manufacturing production was unchanged.

This is another short piece from Zero Hedge yesterday morning EDT---and the three charts included are certainly worth a quick look as well.  I thank Dan Lazicki for this story.

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Dear Bureau of Labor Statistics, About Those Plunging Gasoline Prices...

One of the major reasons for yesterday's market surge to new record highs was the surprise drop and miss in the April wholesale inflation report, or rather make that deflation, when the BLS announced that PPI in April had dropped by 0.4%, far below expectation of a 0.1% increase, of which the BLS said "over 30 percent can be attributed to the index for gasoline, which decreased 4.7 percent."

The implication, of course, being that with the U.S. drifting ever further from the Fed's desired 2% inflation threshold, not only is the probability of a June rate hike negligible, but the last time US macro data was this bad, the Fed launched QE2 (and Operation Twist... and QE3).

Which is all great, we just have one question for the BLS: just what "data" are you looking at?

Because a quick reality check reveals April gasoline prices not only did not drop 4.7%, they rose by 8%!

This is another short story from the Zero Hedge website.  This one was posted there at 4:12 p.m. EDT on Friday afternoon---and it's certainly worth reading.  It's the second offering of the day from Dan Lazicki.

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5 banks expected to plead guilty to felony charges

For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.

But when five of the world's biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.

The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity.

Most if not all of the pleas are expected to come from the banks' holding companies, the people said -- a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.

This news item appeared on The New York Times website very early on Friday morning---and was then was picked up by the folks over at CNBC.  It's worth reading---and I thank Norman Willis for finding it for us.  There was another story about this.  It's a Reuters piece from Thursday morning headlined " SEC a stumbling block in banks' forex guilty pleas: sources"---and it's courtesy of West Virginia reader Elliot Simon.

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Chinese Hackers Force Penn State to Unplug Engineering Computers

Penn State University, which develops sensitive technology for the U.S. Navy, disclosed Friday that Chinese hackers have been sifting through the computers of its engineering school for more than two years.

One of the country’s largest and most productive research universities, Penn State offers a potential treasure trove of technology that’s already being developed with partners for commercial applications. The breach suggests that foreign spies could be using universities as a backdoor to U.S. commercial and defense secrets.

The hackers are so deeply embedded that the engineering college’s computer network will be taken offline for several days while investigators work to eject the intruders.

This was an advanced attack against our College of Engineering by very sophisticated threat actors,” said Penn State President Eric Barron in a letter to professors and students. “This is an incredibly serious situation, and we are devoting all necessary resources to help the college recover as quickly as possible.

This Bloomberg article appeared on their website at 10 a.m. Friday morning Denver time---and it's the first contribution of the day from Roy Stephens.

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U.S. Farmers In "Dire Straits": JPM Warns Of Imminent Liquidity Crunch

Despite the government's 'advice' to young debt-laden students, the tragedy of the American farmer continues with worryingly pessimistic views on the future of the industry. With farmland prices falling for the first time in almost 30 years, credit conditions are weakening dramatically and the Kansas City Fed warns that persistently low crop prices and high input costs reduced profit margins and increased concerns about future loan repayment capacity, and JPMorgan concludes, the industry is currently in dire straits with the potential for a liquidity crunch for farmers into 2016.

Not so long ago, U.S. farmland - whose prices were until recently rising exponentially - was considered by many to be the next asset bubble. Then, almost overnight, the fairytale ended, and as reported in February, U.S. farmland saw its first price drop since 1986.

I'm a farm boy from way back, so I this was a must read for me.  It's another Zero Hedge piece from 2:35 p.m. EDT yesterday---and it's another offering from Dan Lazicki.

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The Triffin Dilemma

There is a fundamental incompatibility between the attainment of global economic stability and having a single national currency perform the role of the world’s reserve currency. This is hardly a new revelation. But events of the past few months have brought this topic back into the spotlight.

Belgian born American economist Robert Triffin first highlighted this incompatibility in the 1960s. He observed that having the U.S. dollar perform the role of the world’s reserve currency created fundamental conflicts of interest between domestic and international economic objectives.

On the one hand, the international economy needed dollars for liquidity purposes and to satisfy demand for reserve assets. But this forced, or at least made it easy, for the U.S. to run consistently large current account deficits.

Triffin argued that such persistent deficits would eventually put pressure on the dollar and lead to the demise of the Bretton Woods system of international exchange.

Jim Rickards has spent a lot of time talking about Triffin's Dilemma, but writer David Canavan takes the discussion far beyond that.  This essay, which is definitely worth reading, showed up on the dailyreckoning.com Internet site yesterday---and I thank Dan Lazicki for sharing it with us.

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The secret corporate takeover hidden in the TPP -- Joseph E. Stiglitz

The United States and the world are engaged in a great debate about new trade agreements. Such pacts used to be called “free-trade agreements”; in fact, they were managed trade agreements, tailored to corporate interests, largely in the U.S. and the European Union. Today, such deals are more often referred to as “partnerships,” as in the Trans-Pacific Partnership (TPP).

But they are not partnerships of equals: the U.S. effectively dictates the terms. Fortunately, America’s “partners” are becoming increasingly resistant.

It is not hard to see why. These agreements go well beyond trade, governing investment and intellectual property as well, imposing fundamental changes to countries’ legal, judicial, and regulatory frameworks, without input or accountability through democratic institutions.

Perhaps the most invidious — and most dishonest — part of such agreements concerns investor protection.

When Joe Stiglitz dumps on something like this, you just know that the document is dangerous to all nations.  I've posted several stories about this in the last year or so, but this one by Joe falls into the must read category.  This short 2-page essay was posted on the marketwatch.com website on Thursday morning EDT---and it's the second offering of the day from reader Norman Willis.

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Doug Noland: Today's New Paradigm

As an analyst of Bubbles, I’ve grown convinced of some things: First, it’s vital to recognize Bubble distortions early before they become deeply ingrained in markets and economic structures (when policymakers turn even more timid). Second, there is always an underlying source of Credit fueling the Bubble. Third, there are typically major distortions that mask the riskiness of the underlying Credit – government involvement is invariably a major factor along with heavy risk intermediation. Fourth, each Bubble has its own nuances that ensure it can go undetected for too long. Fifth, the longer a Bubble inflates the greater the scope of market misperception and structural impairment. And, finally, Bubbles burst when market misperceptions eventually succumb to reality, a development that tends to unfold in the Credit underpinning the boom.

I didn’t think it would come to this. When I began chronicling the “global government finance Bubble” more than six years ago, I saw a backdrop conducive for the biggest Bubble yet: desperate central bankers mindlessly determined to print Trillions, buy Trillions of securities and inflate market values tens of Trillions, while at the same time using zero rates to force savers into risky securities. Yet I never imagined we’d get to mid-2015, with a 5.4% unemployment rate, record stock prices, record M&A, booming corporate debt markets and abundant signs of froth (i.e. Palo Alto, upper-end real estate, Manhattan condos, art, etc.) – and rates would remain stuck at zero. I didn’t expect global bond and currency markets to prove so accommodating.

But here we are - at the precarious stage. I’ve posited that the more deeply systemic a Bubble the less conspicuous its effects. Yet this global Bubble has reached such extremes that obvious signs of excess have sprouted out everywhere – most conspicuously with European debt, M&A, Chinese equities, global sovereign bonds, biotech, etc. And with things turning more overt, there’s now some Wall Street research addressing the topic.

Doug Noland's Credit Bubble Bulletin is always a must read for me---and I thank reader U.D. for sending it my way before I had a chance to dig it up myself.

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Alberta just put the fear into Canadian Prime Minister Stephen Harper

The Koch Brothers may need therapy. Tory blue Alberta has just dismissed a smug, incompetent, corporation-serving oligarchy from power and sent it to wander the wilderness. More than that — voters handed the reins of power to democratic socialists in a jurisdiction ruled and ransacked for decades by the surrogates of Big Oil.

Suddenly, anything is possible in Canadian politics. If Alberta can turn to the NDP, why not Canada? How long can it be before the Tea Party that Stephen Harper has made of federal politics for the past decade comes to an end — and the CPC shares the fate of Alberta’s Progressive Conservatives?

There’s a reason why the Tory federal caucus was like a “morgue” yesterday, to borrow Peter MacKay’s apt description. They know what few are saying out loud: If it happened to Jim Prentice, it could easily happen to Harper — and to every member of his team.

Both Harper and Prentice championed a sort of degraded democracy along the lines of the game plan set by the Trilateral Commission, a body set up in 1973 by establishment types worried about an “excess” of democracy creating a “governability” problem in the West. Those were the days of the energy crisis, the civil rights movement, the women’s movement, environmental protests and a peace movement that ended up forcing a halt to the Vietnam War. Today, those same forces are in play. Back then, the Commission concluded that people — particularly young people — had to be more passive and obedient to established authority if “democracy” was to survive.

This commentary from a week ago Thursday is an absolute must read for all Canadians---and it's worth reading even if you're not.  It appeared on the ipolitics.ca website.  Roy Stephens sent it to me last Saturday---and it obviously had to wait for today's column.

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Oil Sands Land Becomes Alberta’s Hot Real Estate as Oil Rebounds

An indication that crude’s recent rally has further to run can be found in the northern forests of Alberta, where companies are paying the most in eight years to lease land for oil sands development.

Auctions attracted the highest prices since 2007 in the first four months of the year even as Canadian heavy oil slid below $30 a barrel, from $87.23 in June, and producers from Cenovus Energy Inc. to Royal Dutch Shell Plc slashed spending and jobs.

The trend is a sign that companies see the decline to a six-year low in March as temporary. Western Canadian Select crude has bounced back, gaining about 70 percent since March, almost twice as much as U.S. oil futures, amid rising demand for heavy oil from American refiners. Producers are more efficient than before the downturn after companies including Canadian Natural Resources Ltd. cut costs as much as 20 percent.

Well, dear reader, I heard on the radio yesterday afternoon that Calgary real estate sales were down 27 percent in the first quarter of 2015---and down 13 percent in Edmonton.  Based on that, I'm not sure what to make of this story.  It put in an appearance on the Bloomberg Internet site at 5 p.m. Thursday afternoon MDT---and it's another offering from Elliot Simon.

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France offers Mistral contract termination, hopes to get off cheap

France has proposed to terminate the Mistral ships contract, offering €100mn less than Moscow paid upfront, not to mention other costs, and only after Russia allows selling the helicopter carriers to a third party, sources told Kommersant newspaper.

The sum which has been offered to Moscow, the paper has learned, is €784.6 million ($895 million), which is substantially less than €1.163 billion ($1.33 billion) Russia has reportedly spent on the military project – including the advance payment, training and new infrastructure.

France hopes to get off cheap paying back only the money specified in the work completion certificates, according to the source. Russia understandably disagrees with such an offer, insisting that all expenses and losses should be compensated for by the side which terminates the contract. Russia intends to recover the loses associated with training the 400-sailor crew and constructing docks for the vessels in addition to the €892.9 million ($1,017 million) advance payment.

This interesting news item was posted on the Russia Today website at 4:35 a.m. Moscow time on their Friday morning, was 9:35 p.m. EDT in Washington on Thursday evening.  I thank Roy Stephens for sending it our way.

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As default looms, Greece seeks to escape key July payments to ECB

As the country lurches closer to default, Yannis Varoufakis, the country’s flamboyant and polarizing finance minister, broke one of the key taboos over its debt crisis Thursday, calling for the rescheduling of two big debt repayments in July.

On July 20, Greece has to redeem bonds worth €3.46 billion ($3.95 billion), currently held by the European Central Bank. Within a month of that, it faces another similar redemption of €3.19 billion.

Increasingly desperate ad hoc measures have allowed it so far to meet all its obligations to its creditors–the country had to raid the cash reserves of public-sector organizations and even its own IMF holding account to meet a €775 million payment to the Fund earlier this week.

But the July repayments are of a different order of magnitude.

This article showed up on the fortune.com Internet site very early on Thursday morning EDT---and I found it yesterday's edition of the King Report.

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Serbia backs Russian gas pipeline interests

The Serbian foreign minister told his Russian counterpart Friday joining a gas pipeline project through Turkey was in his country's best interests.

"We want to participate in this [Turkish Stream] project," Serbian Foreign Minister Ivaca Dacic said from Moscow. "At present, we can express our readiness for participation in this project because we need reliable gas supplies."

The Kremlin said the Turkish gas project will help ensure European energy security. South Stream, a longer version of the pipeline, was envisioned as a European network before the Russian government pulled it off the table in late 2014.

This UPI story, filed from Moscow, appeared on their Internet site at 9 a.m. EDT yesterday morning---and I thank Roy Stephens for bringing it to our attention.

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German state TV not buying what Poroshenko is selling

"Don’t read Russian newspapers! Poroshenko loses his memory on German TV"

To all appearances, it has become a tradition for the leaders of the Ukrainian government to exhibit themselves as clowns in Europe. But German television has become their acme; once on it, they start bringing on the unprecedented nonsense.

First it was Yatsenyuk to sit in a puddle, reporting on channel one about "the USSR's invasion of Germany" and now Poroshenko, visiting Berlin May 13, has taken up the baton.

On that day the Ukrainian president gave an interview to the Central German Government television station ZDF. The video itself is on the internet at the channel’s website, under the pathetic title “Poroshenko: We will fight to the last drop of blood.

Poroshenko is finished---and he knows it.  This very interesting news item appeared on the fortruss.blogspot.co.uk Internet site on Thursday sometime---and it's certainly worth reading if you have the interest.  It's another story courtesy of Roy Stephens.

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Is Washington Coming to Its Senses? — Paul Craig Roberts

There is much speculation about U.S. Secretary of State John Kerry’s rush visit to Russia in the wake of Russia’s successful Victory Day celebration on May 9. On May 11, Kerry, who was snubbing Russia on the 9th, was on his way to Russia, and Putin consented to see him on May 12.

As time passes we will find out why Kerry was snubbing Putin on May 9 and 3 days later was criticizing Washington’s puppet regime in Ukraine. For what is known at this time, a possible explanation is that Washington is coming to its senses.

If you watched the 1 hour 20 minute video of the Victory Day Parade, you are aware that the celebration sent a powerful message. Russia is a first class military power, and Russia is backed by China and India, whose soldiers marched with Russia’s in the parade.

The celebration in Moscow made it clear that Washington has failed miserably to isolate Russia. What Washington has done is to make the BRICS more unified.

This commentary by Paul was posted on his website yesterday---and certainly falls into the absolute must read category for any serious student of the New Great Game.  The first person through the door with this was reader M.A.

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Batchelor and Cohen Podcast -- Kerry comes to Sochi

One of the most historically significant events to solve the Ukraine Crisis just happened in a meeting between Vladimir Putin, Russian Foreign Minister Lavrov and Secretary of State John Kerry in Sochi on May 12. The world may be a safer place because of it, and John Batchelor and Russian expert Stephen Cohen discuss what they think transpired. This broadcast is clearly the most detailed discussion I have found anywhere about what likely transpired at this meeting.

Cohen begins by describing the major players; the war faction in Washington and NATO see the Ukraine debacle as a Russian aggression and the German led "Normandy Format" sees the same event as a civil war - to be solved through negotiation. Both groups have been very vocal of late and Cohen mentions that Merkel travelled to Moscow on the 10th of May and talked to Putin. Clearly something was agreed upon there. And this set up a meeting two days later with John Kerry and Lavrov in Sochi.

Putin decided to attend. Again this implies communications of significance happened between the major players in advance of this meeting because suddenly Kerry is aligned with the Merkel group.  Cohen speculates that Merkel got a strong statement from the Russian leader that the Donbass rebels would negotiate with Kiev in good faith if Kiev came to the table with the same understanding. Kerry in Sochi was also in agreement and publicly stated that Kiev would be told to stop fighting. There was the game changer. No military solution. Kerry and presumably Obama are siding with Merkel to stop the fighting.

Cohen goes on the discuss the status of sanctions against Russia and the likelihood that they will be lifted, and speculates about Washington's position on the Crimea amalgamation (annexation according to Washington). He states that Kerry did not bring the Crimea discussion up. This is also significant, meaning Washington knows Crimea will remain Russian.

This 39:45 minute video interview was posted on the johnbatchelorshow.com Internet site  on Tuesday---and is definitely worth your while if you have the interest.  I thank Larry Galearis for bringing it to my attention---and now to yours.

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America's Achilles' Heel

Last Saturday, a massive Victory Parade was held in Moscow commemorating the 70-year anniversary of the surrender of Nazi Germany to the Red Army and the erection of the Soviet flag atop the Reichstag in Berlin. There were a few unusual aspects to this parade, which I would like to point out, because they conflict with the western official propaganda narrative.

First, it wasn't just Russian troops that marched in the parade: the troops of 10 other nations took part in it, including the Chinese honor guard and a contingent of Grenadiers from India. Dignitaries from these nations were present in the stands, and the Chinese President Xi Jinping and his wife were seated next to President Vladimir Putin, who, in his speech at the start of the parade, warned against attempts to create a unipolar world—sharp words aimed squarely at the United States and its western allies. Second, a look at the military hardware that rolled through Red Square or flew over it would indicate that, short of an outright nuclear mutual self-annihilation, there isn't much that the U.S. military could throw at Russia that Russia couldn't neutralize.

It would appear that American attempts to isolate Russia have resulted in the exact opposite: if 10 nations, among them the world's largest economy, comprising some 3 billion people, are willing to set aside their differences and stand shoulder to shoulder with the Russians to counter American attempts at global dominance, then clearly the American plan isn't going to work at all.

This longish essay, which is certainly worth reading if you have the time and the interest, put in an appearance on the cluborlov.blogspot.ca website on Tuesday.   There's also link to an "Auf Deutch" version as well.  South African reader B.V. sent me this article on Wednesday---and for length and content reasons, had to wait for Saturday's column.

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Why I Wept at the Russian Parade -- F. William Engdahl

Something extraordinary just took place in Russia and it may have moved our disturbed world one major step nearer to peace and away from a looming new world war. Of all unlikely things, what took place was a nationwide remembrance by Russians of the estimated 27 to perhaps 30 million Soviet citizens who never returned alive from World War II. Yet in what can only be described in a spiritual manner, the events of May 9, Victory Day over Nazism, that took place across all Russia, transcended the specific day of memory on the 70th anniversary of the end of World War II in 1945. It was possible to see a spirit emerge from the moving events unlike anything this author has ever witnessed in his life.

My tears at seeing the silent marchers and at seeing Putin amid them was an unconscious reaction to what, on reflection, I realized was my very personal sense of recognition how remote from anything comparable in my own country, the United States of America, such a memorial march in peace and serenity would be today. There were no “victory” marches after U.S. troops destroyed Iraq; no victory marches after Afghanistan; no victory marches after Libya. Americans today have nothing other than wars of death and destruction to commemorate and veterans coming home with traumas and radiation poisonings that are ignored by their own government.

It’s Zbigniew Brzezinski’s worst geopolitical nightmare come to fruition. And that, thanks to the stupid, short-sighted geopolitical strategy of Brzezinski and the Washington war faction that made it clear to Beijing and to Moscow their only hope for sovereign development and to be free of the dictates of a Washington-Wall Street Sole Superpower was to build an entire monetary and economic space independent of the dollar world.

This very moving essay appeared on the journal-neo.org Internet site on Wednesday---and it's another item that had to wait for today's column.  Once again I thank Roy Stephens for sharing it with us.  It's a must read as far as I'm concerned, but you're doing the final edit, so it's up to you.

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U.S. wakes up to New (Silk) World Order -- Pepe Escobar

The real Masters of the Universe in the U.S. are no weathermen, but arguably they’re starting to feel which way the wind is blowing.

History may signal it all started with this week’s trip to Sochi, led by their paperboy, Secretary of State John Kerry, who met with Foreign Minister Lavrov and then with President Putin.

Arguably, a visual reminder clicked the bells for the real Masters of the Universe; the PLA marching in Red Square on Victory Day side by side with the Russian military. Even under the Stalin-Mao alliance Chinese troops did not march in Red Square.

As a screamer, that rivals the Russian S-500 missile systems. Adults in the Beltway may have done the math and concluded Moscow and Beijing may be on the verge of signing secret military protocols as in the Molotov-Ribbentrop pact. The new game of musical chairs is surely bound to leave Eurasian-obsessed Dr. Zbig “Grand Chessboard” Brzezinski apoplectic.

Here's Pepe doing the honours.  It's also definitely worth your while.  It showed up on the Asia Times website yesterday---and it's also courtesy of Roy Stephens.

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Sprott Money Weekly Wrap Up

Listen to Eric Sprott shares his views on the status of the economy, volatility in the bond markets, the launch of BitGold this week, Indian gold demand, and movement in the precious metals market.

This 10:31 minute audio interview with Eric, along with host Geoff Rutherford, was posted on the sprottmoney.com Internet site on Friday.

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Digital currencies: A gold standard for bitcoin

Anthem Blanchard grew up with gold. His father was such a dedicated gold bug that he flew a biplane towing a 50-foot sign declaring "Legalize Gold!" at President Richard Nixon's second inauguration to promote the idea that ordinary Americans should be allowed to buy it.

The biplane was chased away by the US Secret Service, but James Blanchard III's wish ultimately came true: in December 1974 Americans were allowed to buy the metal after a 40-year moratorium.

The younger Mr Blanchard inherited his father's passion. After finishing his studies in the early 2000s he went to work for GoldMoney, one of the first online gold companies. And now he plans to take gold further into the digital era, launching a gold-backed digital currency that he calls the Hayek, after Friedrich Hayek, the Austrian economist and free-market hero. Hayek also happens to be Anthem Blanchard's middle name. His first name was inspired by a story by Ayn Rand, patron saint of libertarianism.

This interesting story appeared on the Financial Times website yesterday---and it's posted in the clear in this GATA release.

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6 Months Later, Here's What's Happened to the Netherlands' Solar Bike Paths

A Dutch project to turn the nation's bike paths into energy-generating solar roadways has just cleared its first major test with flying colors.

Al Jazeera reports SolaRoad's 70-meter test track near the town of Krommenie outside Amsterdam has generated over 3,000 kilowatt-hours over its first six months of operation, or "enough to provide a single-person household with electricity for a year." That translates to 70 kwh per square meter of solar road per year, which the designers predicted as an "upper limit" during the planning process.

According to Al Jazeera, the roads are constructed of cheap, mass-produced solar panels that are protected with multiple layers of glass, silicon rubber and concrete before being covered with a coating that prevents slippage on the smooth upper surface. The current version can support vehicles of up to 12 metric tonnes (the average U.S. car is just under 2 tonnes), but is not yet ready for use with even heavier vehicles like buses and cargo trucks.

The ambitious project was constructed just a few months ago, with the first SolaRoad opening for traffic on Nov. 12, 2014. At the time, Mic's Sophie Kleeman noted the road "can't be angled toward the sun, so it receives roughly 30% less solar power than roof panels. It was also incredibly expensive — roughly $3.7 million, paid for largely by the local government."

This is very expensive electricity, dear reader, but it is an interesting story with lots of photos.  Roy Stephens sent it to me on Monday---and it had to wait for a spot in today's column.

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India’s Gold Imports Total 85 Tonnes in April

India, the world’s second-largest gold consumer, imported 85 metric tonnes of gold in April, Revenue Secretary Shaktikanta Das said.

Shipments have totaled about 60 tonnes so far in May, Das said in an interview in New Delhi on Friday. Purchases jumped 78 percent in value terms to $3.13 billion in April from a year earlier, the Commerce Ministry said in an e-mailed statement on Friday. Imports in March more than doubled to 125 tonnes from a year earlier, according to the Finance Ministry.

India is set to become the world’s top consumer this year as economic growth accelerates and China’s booming equity markets reduce the appeal of bullion, according to P.R. Somasundaram, the World Gold Council’s managing director in India. A 42 percent rebound in crude oil prices from a six-year low in March and rising gold imports pose a threat to India’s current-account deficit as the country imports about 80 percent of its oil needs and almost all its bullion.

Crude is a more important component of our imports and its prices going up will be a greater worry than gold,” said Dharmakirti Joshi, chief economist at Crisil Ltd. in Mumbai. “I don’t think the government will take any new steps to control gold imports now.

This must read Bloomberg story has had a complete re-write since it was first posted on their website yesterday.  The original headline read "India's gold imports top 100 tonnes for second straight month," but it---and the text---have been changed to reflect the change in the import numbers.  I found the original story on the gata.org Internet site.

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India gold demand likely to rise in Q2

Indian demand for gold is likely to increase in April-June from the first quarter due to strong buying during a major festival, lower prices and robust economic growth, the World Gold Council said on Thursday.

WGC’s second-quarter gold demand numbers for India, expected to be released by mid-August, will likely show an improvement over the first quarter, when China was the top consumer for gold, overtaking India by nearly 100 tonnes.

“Every quarter is going to be higher than the previous ones this year because GDP growth is expected to be higher and gold prices have come down,” said Somasundaram PR, managing director of WGC’s India operations.

Second quarter buying will be boosted by the festival of Akshaya Tritiya, considered one of the most auspicious days to buy gold in India.

Of course all this demand won't make any difference to the price, as JPMorgan et al are still sitting on it in the COMEX futures market---and as I keep saying, until that changes, nothing changes.  This gold related story first appeared appeared on the Reuters website, but was picked up by the mineweb.com Internet site at 3:55 p.m. London time yesterday afternoon, which was 10:55 a.m. in New York.  It's definitely worth reading.

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¤ The Funnies

The photo below if of a gentleman that you won't recognize, but some will certainly know the name.  The only reason I'm posting this is because it goes with a cartoon further down.  I took this photo at a book-signing here in Edmonton two weeks ago---and the man's name is W.P. Kinsella.  He's an Alberta author whose most well-know work is titled "Shoeless Joe"---and the movie that sprang from that book is "Field of Dreams" starring Kevin Costner and Amy Madigan.  The screen play was written by the director, Phil Alden Robinson.  It's a classic---and one of my favourite movies of all time.  Here's what Keith Olbermann had to say about it.

Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.

An updated NI 43-101 resource was calculated on Golden Summit in October 2012 and using 0.3 g/t cutoff  the current resource is 73,580,000 tonnes grading 0.67 g/t Au for total of 1,576,000 contained ounces in the indicated category, and 223,300,000 tonnes grading 0.62 g/t Au for a total of 4,437,000 contained ounces in the inferred category. In addition to the Golden Summit Project the Vinasale also hosts a NI 43-101 resource calculation which was updated in March 2013. Indicated resources are 3.41 million tonnes averaging 1.48 g/t Au for 162,000 ounces, and Inferred resources are 53.25 million tonnes averaging 1.05 g/t Au for 1,799,000 ounces of gold utilizing a cutoff value of 0.5 grams/tonne (g/t) as a possible open pit cutoff. Please send us an email for more information, ir@freegoldventures.com

 

¤ The Wrap

Every week I usually report that the interplay between the managed money traders and the commercials makes up the bulk, if not all of the net change in positioning. Almost always, when the managed money traders buy, prices have advanced during the reporting week and fall when these traders are net sellers. Some might say this is coincidental to price movements, just like some used to say the sun orbits the earth. The fact is that managed money buying causes prices to rise and managed money selling causes prices to fall. Leaving aside that the commercials control short term prices moves through HFT and spoofing and therefore control managed money buying and selling, it is wrong that managed money speculators are causing prices to move. In fact, it’s more than wrong; it’s illegal according to commodity and interstate commerce law.

On this specific issue, the three main culprits behind the silver manipulation, JPMorgan, the CME and the CFTC are silent.  There’s a good reason for their silence – there is no legitimate explanation that can refute that the main, if not sole influence on silver pricing is COMEX positioning between managed money traders and the bookmakers we call commercials. - Silver analyst Ted Butler: 13 May 2015

Yesterday brought the sad new of the passing of guitar and blues legend B.B. King---and many thoughtful readers sent stories and musical suggestions to honour him.  I'm happy to do so.  The first is linked here---and the second one is here.

Last week's classical "blast from the past" was Antonín Dvořák's "Serenade for Winds"---and this week I thought I'd post his equally famous "Serenade for Strings in  E major Op. 22".  He composed the entire work in just two weeks in May of 1875---so the work is exactly 140 years old this month.  Happy anniversary!  The link is here.

Excuse me for thinking this, but the price action of the last couple of days has all the hallmarks of a top [hopefully temporary] in these rallies.  In addition to the cooling off in the precious metal prices themselves, their associated equities have not exactly been roaring to the upside.  The charts below look toppy to me, as does the HUI.

Not that I want to hedge my comments above, but the RSI traces in these metals [or the stocks] certainly hasn't reached the overbought stage by any stretch of the imagination---and there's no reason that they couldn't continue to rally for a while longer.

But unless JPMorgan et al have changed their spots since trading began on Wednesday, these rallies look almost done to me, as the deterioration in he COMEX short positions in both gold and silver has most likely been massive.

I'm being coy about all this because of something that Ted Butler and I have discussed on numerous occasions over the last decade or so---and that's how JPMorgan might slide out from underneath their silver short position in the COMEX futures market and leave the rest of the shorts  [mostly Canada's Scotiabank] to burn in hell as the prices blew sky high.  That could only occur if JPMorgan could arrange [privately/quietly?] with the raptors [the Commercial traders other than the Big 8] who are long the COMEX silver market, to sell their long positions to JPM on the sly.

Could they do it? Beats the hell out of me.  But if the attempt were going to be made, a rally such as we've had since the COT cut-off on Tuesday would be the perfect cover.  Both Ted and I were hoping that JPMorgan would have tried sooner, but they obviously haven't.

Have they done it now?  I don't know, but the possibility, however small, does exist.  I wouldn't bet any money it, but its something that Ted has spoken about before in past commentaries---and I'm mentioning it here again today.

I have no reason to doubt Ted's supposition that JPMorgan [and maybe others] have amassed 350+ million troy ounces of physical silver over that past four years.  And I'm still looking for any explanation as to why a very deep-pocketed buyer would be buying truckloads of SLV and GLD shares in the last week or so---and redeeming them for metal.  In the case of silver, that's 11.5 million troy ounces in less than 3 weeks---and almost 600,000 ounces of gold since the first of May.

Then there's the matter of all the silver deliveries that JPMorgan has taken for its in-house [proprietary] trading account since the beginning of March.

Something stinks to high heaven here---and one wonders how long this will last before there's some sort of resolution.  It's coming at some point, but nobody knows how big and bad it's going to be when it does arrive.

I look forward to next week's trading action with great interest---starting with the Sunday evening open in New York.

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

See on Tuesday.

Ed Steer