Casey Research Publication
Gold & Silver Daily
"The slices off the salami to the downside are getting thinner with each passing day."
 

¤ Yesterday In Gold & Silver

The gold price traded around the $1,380 spot price mark through all of Far East and most of the London session on Friday.  But minutes after the equity markets opened in New York, the gold price got sold down twenty bucks in short order...and the subsequent rally didn't get far.  Once the Comex closed, the gold price got sold down to its low of the day in thin access market trading.

The low price tick came at precisely 4:00 p.m. EDT in New York...and Kitco recorded that as $1,354.60 spot.  After that, it recovered a few dollars doing into the close of electronic trading.

Gold closed at $1,360.20 spot...down $25.70 on the day.  Net volume was very high...around 193,000 contracts.

The silver price was more 'volatile' on Friday.  It topped out around the $22.80 mark around 10:00 a.m. in Tokyo...and was as low as $22.40 shortly after the Comex opened in New York.  The subsequent rally ran into selling just after 9:30 a.m. EDT...just like gold.

From there, the silver price got sold down until the close of London trading, which was 11:00 a.m. in New York...and the anemic rally that followed ended just after 1:00 p.m.  Then, like gold, silver got sold down in the thinly-traded electronic market...and the low price tick came at, or very close to 4:00 p.m. EDT in New York.  That was pretty much it for the day.

Silver's low tick was recorded as $22.09 spot.

Silver closed the Friday trading session at $22.26 spot...down 43 cents from Thursday's close.  Gross volume was around the 46,000 contract mark.

The dollar index closed in New York at 83.745 late Thursday afternoon...and then traded in a tight range just under the 84.00 mark right up until 8:00 a.m. EDT.  Then away it went to the upside...and almost all the gains were in by 9:20 a.m...ten minutes before the equity markets opened in New York.  The high tick was 84.31...and it sold off just a hair going into the close, finishing the Friday session at 84.21...up 47 basis points on the day.

Gold and silver didn't even begin to seriously sell off until about fifteen minutes after the big dollar index rally was done, so to pin yesterday's precious metal price action on the currencies is laughable.

Once again the gold stocks gapped down at the open...and the followed the gold price lower, with the absolute low of the day coming at the 4:00 p.m. EDT close of the equity markets in New York...and also at the precise low of gold for the day.  The HUI got clocked again...down 4.09%.

Surprisingly enough, the silver miners that make up Nick Laird's Intraday Silver Sentiment Index weren't hit quite as hard...but that's little consolation to long-suffering stockholders...as they finished down 'only' 3.30%.

(Click on  image to enlarge)

Here's the long-term Silver Sentiment Index that shows just how badly the silver stocks have been slaughtered since December of 2012.

(Click on image to enlarge)

One of the other reasons that the sell-offs in the metal are hitting the shares so hard, is that mutual funds are feeling the effects of massive redemptions...and they have to sell whether they want to or not.  The markets are very illiquid...and this just makes matters worse.

But the one big question you should be asking yourself is this..."Who is buying all these shares that the precious metals investors are selling in such a panic?"  Think about it.  Somebody is...and whoever they are [and I have my suspicions] they have infinitely deep pockets...and are the very definition of "strong hands".

The CME's Daily Delivery Report showed that zero silver and 157 silver contracts were posted for delivery on Tuesday within the Comex-approved depositories.  The big short/issuers were ABN Amro and Jefferies...with 120 and 29 contracts respectively.  The two largest long/stoppers were, once again, the ringleaders in the silver price management scheme...Canada's Bank of Nova Scotia with 113 contracts, and JPMorgan Chase with 30 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

GLD had another withdrawal by an authorized participant yesterday.  This time 96,987 troy ounces were removed for parts unknown.  SLV had a big withdrawal as well, as 2,220,839 troy ounces were taken out.

The U.S. Mint reported selling another 3,000 ounces of gold eagles yesterday...and that was it.  Month-to-date the mint has reported selling 45,000 ounces of gold eagles...9,000 one-ounce 24K gold buffaloes...and 1,733,500 silver eagles.  Based on these figures, the silver/gold sales ratio is just over 31 to 1.  Without question that ratio would be much higher if the mint was able to produce all the silver eagles that were required...and as the mint has already stated publicly, it could produce more if it had the necessary blanks.

Over at the Comex-approved depositories on Thursday, they reported receiving only one good delivery bar of silver, weighing in a 1,019.900 troy ounces...but they shipped 856,973 troy ounces of the stuff out the door.  The link to that activity is here.

In gold on Thursday, these same depositories reported receiving 65,425 troy ounces of the stuff...and shipped 64,659 ounce of same out the door.  All the activity was at Scotia Mocatta...and the link to that is here.

The Commitment of Traders Report, for positions held at the 1:30 p.m. EDT close of Comex trading on Tuesday, was pretty much as I had hoped/expected...as there were small improvements in the Commercial net short positions in both gold and silver.

In silver, the Commercial net short position declined by 6.2 million ounces...and currently sits at 66.1 million ounces.  Not a record low, but within hailing distance, that's for sure...and I'll have more to say about this in 'The Wrap'.

Ted Butler said that JPMorgan's short position didn't change much from the previous reporting week...and is still around the 18,000 contract mark, or 90 million ounces...which represents 136% of the Commercial net short position.  That's outrageous!!!  If their short position vanished overnight, the remaining Commercial traders would be net long the Comex silver market...just like the traders in the other two COT categories...and we'd have a 3-digit silver price in a heartbeat.

The total open interest in silver is reported as 144,666 contracts...but if you dip in the Disaggregated COT Report, you find that of that amount...36,620 of these contracts are market-neutral spread trades.  So the true open interest in silver is only 108,046 contracts...and once you remove them from the equation, the concentrated short positions of the major players really stand out.

In silver, the Big 4 traders are short 34.1 percent of the entire Comex futures market, once you subtract out all the b.s. market-neutral spread trades.  In troy ounces, that 34.1 percent represents 184.4 million ounces...two and a half times the entire Commercial net short position!

And, according to the monthly Bank Participation Report in silver, only three big bullion banks actually matter, so in fact, it's the Big 3...not the Big 4. They are JPMorgan Chase, Canada's Bank of Nova Scotia...and HSBC USA.  The short position of the 4th largest bank is immaterial.

The '5 through 8' largest traders are short an additional 10.6 percent of the Comex silver market...but at well under 3% each, they just don't matter in the grand scheme of things.

But, in total, the Big 8 traders are short 45% of the entire Comex silver market...and that's a minimum number.  You can't make this stuff up.

In gold, the Commercial net short position declined by 357,300 troy ounces during the reporting week...and now sits at 8.41 million ounces.

There are spread trades in gold as well...and the ones that are visible in the Disaggregated COT Report total 75,170 contracts.  The total open interest shows as 443,806 contracts...and subtracting out these market-neutral spread trades leaves a true open interest of 368,636 contracts.

In actual fact, dear reader, there are more spread trades than are being shown in this report, but if they showed all spread trades, then the true concentrations of all the market participants would become instantly apparent...and that's precisely why the report doesn't show them all.  That's why I say that the true concentrations are actually higher, but it's impossible to know by how much.

Anyway, the Big 4 are short 8.30 million ounces of gold...virtually 100% of the Commercial net short position of 8.41 million ounces.  On a 'net' basis, they are short 22.5 percent of the entire Comex gold market.  The '5 through 8' traders are short 4.39 million ounces of gold...and that represents an additional 11.9 percentage points of the Comex gold market.

So, the Big 8 are short 151% of the Commercial net short position in gold...and short 34.4% of the entire Comex futures market in gold.

But to show you how much more concentrated the short position is in silver vs. gold...the Big 4 are short 257% of the Commercial net short position in silver.  In gold, the Big 4 are short 98.7% of the Commercial net short position.  Both figures are outrageous and obscene...and the CME Group does nothing, the CFTC does nothing...and the precious metals mining companies do nothing.  As I said a few paragraphs ago...you couldn't make this stuff up.

Here's Nick Laird's most excellent "Days of World Production to Cover Short Positions" chart.  Except for the willfully blind, it tells you all you need to know at a glance.

(Click on image to enlarge)

I haven't spoken about how business has been at the bullion store recently, so I shall make amends now.  There's no question that business has slowed down quite a bit now that we're four weeks past the big engineered price decline.  Deliveries of bullion are still an issue, but somewhat better than they were ten days ago.  However, because of the long-term 'special relationship' that the story owner has had with his bullion supplier, this 'better' delivery situation many not be applicable across the board for all bullion stores.

The wholesaler's premiums have come down a bit, but are still quite elevated compared to what they were before April 16th when all hell broke loose...and we're nowhere near being back to what I would consider 'normal'.  We aren't able to offer the same discount on future orders that we used to be able to...but I suspect that the situation will slowly revert back to 'normal' over time.

The other things that aren't 'normal' anymore is the level of business activity...and the internal structure of it.  I would estimate the silver sales are permanently higher by 25 to 50% on a daily basis, than the baseline amount that our store did prior to April 15th.  And if that isn't impressive enough, I'd estimate gold sales are up between 300 and 500% now that things are 'back to normal'.  This new level of activity is going to take some getting used to...and it will be interesting to see how the mints cope with this new demand structure as time marches on.

Of course these demand figures, whether local, national...or international, are price sensitive...and bear watching closely.  But many customers are mentioning the fact that they are grateful that the precious metals are "on sale"...and as long as they are, demand is certain to remain strong.

And your "cute quota" for the day...

I have a lot of stories today...but since it's the weekend, I hope you can find the time to spend on the ones that interest you the most.

 

¤ Critical Reads

Bankster alert: Tom Harkin introduces Glass-Steagall bill in Senate

The push to restore the Glass-Steagall banking act has returned to the U.S. Senate. 

Sen. Tom Harkin on Thursday introduced S. 985, which would rebuild the wall that had once separated commercial banking from brokerage and investment speculation. The Iowa Democrat’s bill came on the 80th anniversary of the original 1933 Glass Steagall Act.

The text of S.985 was not posted on the Senate website as of Friday afternoon, but it is believed to resemble HR 129, introduced by Reps. Marcy Kaptur, D-Ohio, and Walter Jones, R-N.C. Their measure has 62 bipartisan sponsors in the House.

Meantime, 20 state legislatures are considering resolutions urging Congress to reinstate Glass-Steagall. Lawmakers in four states -- South Dakota, Maine, Indiana and Alabama – have passed such measures.

This news item was posted on the examiner.com Internet site yesterday...and I thank Bill Gebhardt for today's first story.

Read more...

This Is No Ordinary Scandal: Wall Street Journal

We are in the midst of the worst Washington scandal since Watergate. The reputation of the Obama White House has, among conservatives, gone from sketchy to sinister, and, among liberals, from unsatisfying to dangerous. No one likes what they're seeing. The Justice Department assault on the Associated Press and the ugly politicization of the Internal Revenue Service have left the administration's credibility deeply, probably irretrievably damaged. They don't look jerky now, they look dirty. The patina of high-mindedness the president enjoyed is gone.

Something big has shifted. The standing of the administration has changed.

As always it comes down to trust. Do you trust the president's answers when he's pressed on an uncomfortable story? Do you trust his people to be sober and fair-minded as they go about their work? Do you trust the IRS and the Justice Department? You do not.

This op-ed piece by Peggy Noonan showed up in The Wall Street Journal on Thursday...and I found it in yesterday's edition of the King Report.

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Surprise! Inflation is too low almost everywhere on earth

The leading economies of the industrialized nations may not have a lot in common, but they are all afflicted by this: Inflation is too low.

That was the astoundingly consistent theme out of a range of data released Thursday. Prices rose 1.1 percent over the 12 months that ended in April in Germany, 0.8 percent in France and 1.3 percent in Italy. In the United States, the consumer price index rose 1.1 percent over the last year. Japan reported surprisingly strong first-quarter growth this week as its aggressive new stimulus policies took effect, but that came against a backdrop of continued falling prices; its consumer price index fell 0.9 percent in the year that ended in March.

The below-trend inflation is partly attributable to falling commodities prices, and just as policy shouldn’t overreact when a short-term commodity blip causes inflation, it shouldn’t make the same mistake in reverse. But even excluding food and energy, U.S. CPI was up only 1.7 percent, still below the level of inflation the Federal Reserve is aiming for. And the situation in Europe is particularly worrisome; if the euro zone is going to have any hope of rebalancing its economy without a prolonged depression, it will need higher inflation in core European countries like Germany and France, offset by lower inflation in countries like Greece and Spain. Instead, prices are rising too slowly even in the core, and there is deflation, or falling prices, in Greece.

The biggest conclusion to draw from all of this is that warnings that massive quantitative easing efforts would spark explosive inflation are turning out to be as wrongheaded as can be. In the United States and Japan, central banks now have open-ended policies of printing money to buy assets. But while the money seems to be finding its way into asset markets, such as for stocks and corporate debt, it isn’t being circulated so widely as to drive up prices for consumers.

This article, along with some excellent charts, appeared in The Washington Post on Thursday...and it's courtesy of West Virginia reader Elliot Simon.

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Doug Noland: Financial Euphoria

From my perspective, the global nature of excesses and fragilities is the most worrying aspect to the current Financial Euphoria. Essentially, the entire world faces acute financial and economic instability. The entire world suffers from a widening gulf between inflating asset prices and mounting economic vulnerabilities. Seemingly the entire world suffers from an increasingly protracted period of near-zero rates, aggressive central bank monetary stimulus and a desperate search for market returns. The entire global financial “system” is an over-liquefied speculative Bubble – stoked by central bankers responding desperately to acute financial and economic fragilities.

As noted above, find a speculative Bubble and there will be an underlying source of monetary disorder. From my perspective, Bubbles are at their core about a self-reinforcing over-issuance of mispriced finance. Major market misperceptions are integral to fueling Bubbles – and these misperceptions are often associated with some form of government support/backing of the underlying Credit financing the boom.

These days, the dynamic of over-issued, mispriced finance is a global phenomenon – the U.S., Europe, Japan, China, Asia and the “developing” economies. The perception that central bankers will ensure ongoing asset inflation is an unprecedented global phenomenon. The collapse in yields and risk premiums in debt markets across the globe is unlike anything I’ve ever witnessed or studied historically. These days, asset inflation, speculation and Bubbles prevail virtually everywhere. Moreover, the gulfs between inflating assets and weakening economic fundamentals seemingly widen everywhere, as Financial Euphoria engulfs debt and equity securities markets around the world. As noted this week by the great market watcher and historian Art Cashin: This market is unlike anything we’ve ever experienced.

Doug's Credit Bubble Bulletin, posted on the prudentbear.com Internet site every Friday, is always a must read...and yesterday evening's edition is no exception.  I thank reader U.D. for sending it along.

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Study Indicates That America's Driving Boom is Over

The "driving boom is over," or so says a new study of American attitudes toward the automobile.

After decades of adding more cars to their household fleet while moving further and further out into the suburbs, Americans are waiting longer to get licensed, driving less and increasingly turning to alternatives such as mass transit or car-sharing programs, according to a new study by the U.S. Public Research Interest Group, or PIRG.

Declaring the boom in automotive transportation "over," the study stresses that, "the time has come for America to hit the reset button on transportation policy—replacing the policy infrastructure of the driving boom years with a more efficient, flexible and nimble system that is better able to meet the transportation needs of the 21st century."

This very interesting CNBC article appeared on their website early in the afternoon on Wednesday...and I've been saving it for today's column.  I thank Elliot Simon for bringing it to our attention.

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Doug Casey: The Virtues of Capitalism

What can be said of Doug Casey? His life and career are the stuff of legend among investors and speculators, especially in the junior resource space.

Doug is a friend and mentor to Chris and I. For over 25 years I've read his monthly missives, devoured his books and attended his   workshops. I credit Doug with leading me to my first big score, and imparting enough wisdom to make me see the sense of holding onto that winner as long as it made sense to. The value of that lesson was something that can never be repaid.

Doug was one of the key people, along with my friend "Dave" with whom I credit for arming me with the confidence to leave my comfortable life in the States, family, friends and business partners to experience the broader world and invest and speculate in the frontier markets.

Although he isn't always right, and has been early on many of his calls, his viewpoints are always enlightening and entertaining!

This interview with Doug was posted on the zerohedge.com Internet site on Thursday...and is definitely worth reading.

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A Brazilian WTO chief could prove painful for the West

Late last Tuesday, after months of intense lobbying, and campaigning visits to 47 countries, Roberto Azevedo was confirmed as the next director general of the World Trade Organisation.

Amidst the Queen’s Speech and the resignation of a certain football manager, Azevedo’s appointment barely flickered on the U.K. news radar. Yet it was an event of some significance that could have major implications for the future shape of the global economy.

While less well-known than the International Monetary Fund, the WTO is the most important economic multilateral on earth. With 159 member states, this Geneva-based organisation can be likened to a vast and highly specialised international court, designed to arbitrate on complex trade disputes between governments that come into conflict, so as to keep protectionism in check.

If a nation feels another is unfairly blocking its exports, it complains to the WTO. Ranks of in-house lawyers then interpret international trade rules and issue an independent judgment. If countries found guilty don’t comply, then all members are meant to stop trading with them and close ranks — although it very rarely comes to that.

This story appeared on the telegraph.co.uk Internet site last Saturday...and it's been sitting in my in-box since then, awaiting a spot in today's column.  I thank Roy Stephens for his first offering of the day.

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BoE policymaker Martin Weale douses hopes of monetary stimulus when Mark Carney arrives

Martin Weale, a member of the rate-setting Monetary Policy Committee, warned that more stimulus risked a damaging surge in inflation because price rises have already been higher than the Bank's 2pc target for most of the past four years. The persistent overshoot, he said, “is a constraint on my freedom of action”.

“Failure to damp sufficiently any new shock pushing up on inflation would result in inflation expectations becoming more entrenched. That, in my view, limits the scope we have to support demand at the current juncture,” he told the British-American Business Council Transatlantic Conference in Birmingham.

George Osborne appointed Mr Carney on a ticket of “monetary activism” to help boost growth. The Chancellor has also asked the MPC to investigate how it might use “forward guidance” as an additional tool. But Mr Weale, who has been sceptical about the policy, suggested there is little it can achieve.

This Roy Stephens offering showed up on The Telegraph's website early yesterday afternoon BST.

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Outside View: Europe's permanent recession

On May 6, I wrote Europe was in danger of falling into a permanent recession -- a depression.

Now, the European statistical agencies report France joined Italy and Spain's recessions during the first quarter and economic activity across the entire eurozone continued to contract.

The straightjacket imposed by euro-think -- allegiance to a failed experiment in a common currency, ill-conceived and overzealous austerity measures and halting and inadequate labor market reforms -- caused continued economic contraction across the entire eurozone.

This commentary was posted on the upi.com Internet site yesterday...and it's definitely worth your time.  I thank Roy Stephens again.

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Nuclear Headache in Germany: Task of Decommissioning Plants Is Herculean

The dismantling of Germany's nuclear power plants will be one of the greatest tasks of the century as the country moves to phase out atomic energy. It will take at least until 2080 to complete the job. But what happens if energy utility companies who own the facilities go bust before the work is done?

When politicians put far too much pathos into their speeches, people should be on their guard -- with a notable exception. There is one issue where no comparison is overinflated and no superlative appears exaggerated: Winfried Kretschmann, for instance -- the governor of the southern German state of Baden-Württemberg and a member of Germany's Green Party -- spoke of "theological timeframes" that now need to be decided upon.

The issue is nuclear waste and its safe disposal. Germany will have to build a storage facility deep underground that can survive the ravages of wars, revolutions and even another ice age. Indeed, the remains of the nuclear age will have to be kept in a final repository for 1 million years -- longer than the human race has existed.

This very interesting and very profound 2-page essay was posted on the German website spiegel.de on Thursday, May 10th.  Marshall Angeles sent it to me on the Tuesday...and it's been waiting for a place in today's column.

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Russia slammed by U.S. for sending anti-ship missiles to Syria

The Obama administration denounced Russia on Friday for providing Syrian President Bashar Assad's regime with anti-ship missiles, saying the weapons would only worsen a war that Washington and Moscow have been promising to work together on stopping.

Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, criticized what he called an "unfortunate decision that will embolden the regime and prolong the suffering." He spoke at a news conference after the New York Times reported that Russia recently delivered an advanced version of Yakhont anti-ship cruise missiles to Syria.

"It's ill-timed and very unfortunate," Dempsey said.

Defense Secretary Chuck Hagel also urged Russia to rethink its military aid, saying that the U.S. and Russia both wanted to stabilize Syria after more than two years of civil war but that the Kremlin's military support makes the situation even more dangerous.

If this isn't a clear-cut case of the pot calling the kettle black, then I don't know what is.  This AP story, posted on the foxnews.com Internet site yesterday, is a must read for all students of the "New Great Game"...as are the next two stories. I thank Marshall Angeles for his second offering in a row.

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In Diplomatic Escalation, Russia Publicly Exposes the CIA Station Chief in Moscow

Earlier this week, the CIA's Russian outpost was deeply humiliated when (in a calculated move following accusations that the U.S. had not gotten appropriate Russian information on the two Boston bombers, and following the visit of John Kerry whose primary objective was to, unsuccessfully, get Russia to relent on Syria) Russia's FSB exposed and broadcast on live TV the arrest of its agents caught while attempting to recruit a Russian spy.

Back then we suggested to "expect a prompt retaliation by the US" however it turns out Russia was not nearly done with embarrassing the US in what is becoming an obvious campaign to humiliate the US intelligence service, this time by going where very few clandestine operations go, at least during peacetime detente: by publicly exposing the head counterparty US spy.

As The Telegraph reports, "Russia's Federal Security Service has publicly revealed the identity of a man it calls the CIA station chief in Moscow, in what experts say is a serious breach of intelligence protocol."

This Zero Hedge article was posted on their website early yesterday afternoon Eastern Daylight Time...and it's a must read...as is The Telegraph story to which it is linked.  I thank 'David in California' for finding it for us.

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FSB: CIA crossed ‘red line’ with agent Fogle

The CIA has crossed a certain ‘red line’ in professional ethics of intelligence as American spy Ryan Fogle attempted to recruit a Russian agent, an FSB operative told Russia Today.

In case with Fogle, the CIA crossed the red line and we had no choice but to react observing official procedures,” a representative of the Russian Security Service, the FSB, said in an interview with RT

The spy story broke earlier this week after it was made public that Fogle – who had worked under the guise of a third secretary at the U.S. Embassy in Moscow – was detained after being caught red-handed trying to recruit a Russian intelligence officer for the CIA. Following the incident he was expelled from Russia.

As early as by autumn 2011, the FSB was aware that the CIA was pursuing a goal to get an informer within the Russian special services, the agent told RT.

This story was posted on the Russia Today website in the early afternoon Moscow time...and it's another offering from Roy Stephens.

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Pakistan: Geopolitical conundrum

Sixty-six percent of Pakistan's 185 million people are under the age of 30 and almost all of them say they are worse off today than when they were 21.

They also say they would rather have a "strong leader" or one with a "strong hand" than a democracy.

Now they have what they wish -- Nawaz Sharif, 63, a former prime minister who was ousted in 1999 in Pakistan's fourth military coup since independence in 1947.

Thus, Pakistan has been ruled by the military for 33 years, or half of its life as an independent nation.

This is upi.com news item is definitely worth your time...and is an absolute must read for all "New Great Game" students.  Roy Stephens sent it to me on Wednesday...and I've been saving it for today as well.

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Drones...and the Rivalry Between the U.S. and China

This week the Navy will launch an entirely autonomous combat drone — without a pilot on a joystick anywhere — off the deck of an aircraft carrier, the George H. W. Bush. The drone will then try to land aboard the same ship, a feat only a relatively few human pilots in the world can accomplish.

This exercise is the beginning of a new chapter in military history: autonomous drone warfare. But it is also an ominous turn in a potentially dangerous military rivalry now building between the United States and China.

The X-47B, a stealth plane nicknamed “the Robot” by Navy crews, is a big bird — 38 feet long, with a 62-foot wingspan — that flies at high subsonic speeds with a range of over 2,000 miles. But it is the technology inside the Robot that makes it a game-changer in East Asia. Its entirely computerized takeoff, flight and landing raise the possibility of dozens or hundreds of its successors engaged in combat at once.

It is also capable of withstanding radiation levels that would kill a human pilot and destroy a regular jet’s electronics: in addition to conventional bombs, successors to this test plane could be equipped to carry a high-power microwave, a device that emits a burst of radiation that would fry a tech-savvy enemy’s power grids, knocking out everything connected to it, including computer networks that connect satellites, ships and precision-guided missiles.

This op-ed piece showed up on The New York Times website last Sunday...and is another story that had to wait until today's column.  It's also had a change in headline...and now reads "Pilotless Planes, Pacific Tensions".  It sounds almost benign now...but it's an eye-opener...and a must read.  I thank Roy Stephens for sending it.

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Psychopaths: The market...and life...Stephan Verstappen

Defense Against the Psychopath is a documentary excerpted from chapter one of my book; The Art of Urban Survival. It teaches people how to recognize and defend against our society's most dangerous predators, psychopaths. 

The first line of defense against these people is acknowledging their existence.

This very disturbing 39-minute video falls into the absolute must watch category.  Ever since I was aware of their presence, I run everyone I have medium to long-term dealings with, through this "sociopathic filter"...and, dear reader, you should do precisely the same thing.  I thank reader "Steve in Las Vegas" for bringing this first rate educational video to my attention...and now to yours.

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$625K in gold stolen at Miami International Airport

A box containing $625,000 in gold arrived at Miami International Airport early Tuesday but disappeared about an hour and a half later, Miami-Dade police say.

An American Airlines plane arrived at Miami International Airport from Guayaquil, Ecuador, and docked at Gate D3 at 4:42 a.m. Tuesday, according to a Miami-Dade Police Department incident report. A group of employees unloaded the plane -- including the box containing the gold -- and moved it to the other side of the plane about 5:15 a.m.

A tug arrived at the plane from Gate D6, according to the report. It then drove away with the cart holding the plane's cargo at 5:22 a.m. Surveillance video showed the tug continue to D37 before it entered an alley and disappeared from the video.

This story is a couple of days old, but I didn't have space for it until now...and I thank Marshall Angeles for sending it along.

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Gold Seen Crushed as Credit Suisse Forecasts $1,100 in Year

Gold, down 17 percent since January, is poised to lose 20 percent in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse Group AG said.

Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank. Lower prices are unlikely to lure more central-bank buying, said Deverell, who worked at the Reserve Bank of Australia for 10 years before joining Credit Suisse in 2010.

“Gold is going to get crushed,” Deverell told reporters in London today. “The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”

This Bloomberg article was posted on their website late Thursday morning MST...and if you believe this 'analyst'...then I have a bridge I'd like to sell you.  I thank Ken Hurt for sharing it with us.

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Gold Bears Revived as Rout Resumes After Coin Rush: Commodities

Gold bears are dominant again after prices resumed their slump and billionaire George Soros joined investors selling holdings in exchange-traded products that have retreated to a two-year low.

Seventeen analysts surveyed by Bloomberg expect prices to fall next week, with eight bullish and three neutral, the highest proportion of bears in two weeks. The analysts were divided a week ago after gold rebounded as much as 13 percent from the two-year low of $1,321.95 an ounce on April 16. ETP holdings slid 16 percent to 2,207.1 metric tons this year, the lowest since July 2011, data compiled by Bloomberg show. 

“The momentum has slowed significantly,” said Jeremy Baker, a senior commodities strategist who oversees about $800 million of assets at Harcourt Investment Consulting AG in Zurich and who forecasts prices may drop as low as $1,200 in six months. “The safe haven has definitely lost its gleam. We are in a declining phase here.”

This Bloomberg story is from yesterday...and another offering from reader Ken Hurt.  Along with that bridge, I have some swamp land in Florida for sale as well.

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Sprott's Thoughts: Where is the Gold Coming From?

We have tried to balance supply and demand figures in the gold market to answer a 15 year old question - “where is the supply of gold coming from?” In 1998, Frank Veneroso first suggested that it was the Western Central Banks that were supplying the market and we’ve been looking for a smoking gun ever since.

We have published our research several times, but none has got more attention amongst gold-watchers than our two pieces on the activities of Western Central Banks. In the Markets at a Glance entitled “Do Western Central Banks Have Any Gold Left Part II” we surmised that more than 4,500 tonnes of gold was exported by the United States between 1991 and 2012. Further, we postulated that it must have come from the US Government as they would be the only viable provider of metal in this quantity.  There is no other seller in the market that could explain the discrepancy in these import/export figures. Let’s review the updated figures and then examine some expert opinions.

This short commentary by Eric Sprott and David Franklin was posted on the sprottgroup.com Internet site yesterday...and is definitely worth reading.

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How Iran Benefits From an Illicit Gold Trade With Turkey

Turkish prime minister Recep Tayyip Erdoğan has arrived in Washington, D.C. for a much-anticipated summit with President Barack Obama. The timing of the visit -- amid reports of chemical weapons usage in Syria and an attack against a Turkish border town by alleged Syrian agents -- will make it hard to talk about anything other than the civil war in Syria.

But some members of Congress want to draw attention to a less-obvious issue. Last month, a bipartisan group of 47 members of Congress penned a letter to Secretaries John Kerry and Jack Lew calling for clarification on Turkey's financial dealings with Iran. Under the initiative of South Carolina Republican Representative Jeff Duncan, the letter expressed deep concerns over Turkey's gold dealings that have helped Iran skirt Western sanctions designed to curtail Tehran's illicit nuclear program.

This short essay was posted in The Atlantic early yesterday morning EDT...and I thank Manitoba reader Ulrike Marx for her first of three stories in a row in today's column.

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Mine union threatens to bring South Africa to 'standstill'

The leader of South Africa's biggest platinum mining union threatened on Friday to bring Africa's No. 1 economy "to a standstill" and demanded a meeting with President Jacob Zuma, ramping up the rhetoric in an 18-month labor crisis.

The rand, which tumbled to a four-year low against the dollar on Thursday on fears of a strike at Anglo American Platinum (Amplats), extended its slide on concerns about further disruptions to an already struggling economy.

The currency fell as low as 9.4334, its lowest since April 2009 when emerging markets were still reeling from the effects of the global financial crisis.

A protest strike called for Friday by at least two AMCU officials failed to materialize as all workers reported for the morning shift as normal.

This Reuters story was filed from Rustenburg, South Africa...and posted on their Internet site early yesterday morning EDT.

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Anti-gold campaign at play in India?

It could have posed as a model scheme to curtail gold imports. In order to stifle India’s appetite for gold, the government has introduced inflation index bonds. The first tranche amounting to around $364 million (R20 billion) is to be introduced on June 4.

Inflation Indexed Bonds (IIBs) are a new category of debt instruments to be introduced in India, where the coupon and principal amount would be linked to the rate of wholesale price inflation with a lag of four months. The authorities have said the objective of introducing such bonds is to channelise savings into productive sources of instruments from unproductive ones like gold.

Slowly but surely, there seems to be an anti-gold campaign that is at play in India. The concerted effort by the Indian government to discredit gold by imposing several curbs, and channelise consumers away from the precious metal, indicates a desperation that has not gone unnoticed by savvy investors.

This very interesting article was filed from Mumbai...and posted on the mineweb.com Internet site yesterday.  It's Ulrike's third and final offering in today's column.

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John Butler – QE and a Misesian crack up boom

Alasdair Macleod chatted with John Butler, author of The Golden Revolution and the Amphora Report investment newsletter.

John briefly details his motives for writing his book, before the discussion moves onto the latest knockdown in gold against the current news stories regarding global demand.

From weak hands to strong, from West to East, from paper to physical, once a floor is found and the physical supply becomes tight, both Alasdair and John agree that the market will then start to clear at higher prices.

This 27-minute podcast, posted on the goldmoney.com Internet site on Thursday, is certainly worth your time.  I thank Elliot Simon for digging it up for us.

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'Naive' to think gold isn't manipulated too, fund manager John Butler says

Fund manager John Butler, interviewed by Max Keiser on "The Keiser Report" on the Russia Today network, remarks that it's "naive," amid all the acknowledged manipulation of markets going on today, to think that the gold market is not being manipulated too. Keiser's interview with Butler begins at the 14:25 mark in the video posted at the youtube.com Internet site...and I thank Chris Powell for wordsmithing the above preamble.

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David Stockman..."FDR: Sowing the Seeds of Chaos"

The long-lasting imprint from FDR’s famous “Hundred Days” did not stem from the bank holiday, national industrial recovery act, the farm adjustment act, the Tennessee Valley Authority, or the public works administration.

Instead, it is lodged in the footnotes of standard histories; namely, FDR’s April 1933 order confiscating every ounce of gold held by private citizens and businesses throughout the United States. Shortly thereafter he also embraced the Thomas Amendment, giving him open-ended authority to drastically reduce the gold content of the dollar; that is, to trash the nation’s currency.

These actions did not constitute merely a belated burial of the “barbarous relic.” In the larger scheme of monetary history, they marked a crucial tipping point. They initiated a process of monetary deformation that led straight to Nixon’s abomination at Camp David, Greenspan’s panic at the time of the 1998 Long-Term Capital Management crisis, and the final destruction of monetary integrity and financial discipline during the BlackBerry Panic of 2008.

This longish absolute must read is an excerpt from David Stockman's book "The Great Deformation: The Corruption of Capitalism in America".  It was posted on the mises.org Internet site on Thursday...and I thank Elliot Simon for today's last story.

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¤ The Funnies

 

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The New Cold War - Prepare Your Portfolio for the Fallout

What Russia gives, Russia can take away.  And with the expiration of Megatons to Megawatts at the end of 2013, the 24 million tons of cheap uranium the U.S. gets through the agreement every year will be going to the highest bidder.

That represents more than half of America's current source of nuclear fuel, and you can bet there will be no shortage of competition for it - China alone has twice as many reactors planned as currently operate in the U.S.

Clearly, uranium prices - not to mention electricity rates - have nowhere to go but up. Learn more now.


 

¤ The Wrap

The cat is still stuck up the tree and we don’t know how to get it down. Keynes would suggest building a bigger ladder. Hayek would wait for the cat to jump down of its own accord. The European approach involves chopping the tree down. - Economist George Akerlof at an IMF conference on rethinking macroeconomics

Today's pop 'blast from the past' takes me back to my hippy days of the mid-1960s in Toronto.  This is the first time I've heard this song in about forty-five years...and if you're of that age, you should know it right away.  The link to the youtube.com video is here.

Richard Addinsell's Warsaw Concerto was written for the 1941 film Dangerous Moonlight, and continues to be a popular concert and recording piece. The film-makers wanted something in the style of Sergei Rachmaninoff, but were unable to persuade Rachmaninoff himself to write a piece. Roy Douglas orchestrated the concerto. It has been recorded over one hundred times and has sold in excess of three million copies.

As was common with film music until the 1950s, many of Addinsell's scores were destroyed by the studios as it was assumed there would be no further interest in them. However, recordings of his film music have been issued since his death, reconstructed by musicologist and composer Philip Lane from the soundtracks of the films themselves which, knowing orchestral music as well as I do, I find amazing!

I posted this classical piece several years back, but thought I'd post it again.  Here's Philip Fowke doing the honours.  The video quality could be better, but the musicianship and interpretation is hard to beat. The link to the youtube.com video is here.

So...are we done yet?

As bad as the last few days have been, JPMorgan et al haven't succeeded in taking out the Far East lows set on the morning of April 16th in Hong Kong.  They came within pennies in silver...but missed gold's old low by thirty-five bucks.

Unless they can find more longs prepared to sell, or tech funds prepared to go short this far below the major moving averages, 'da boyz' can't get the prices any lower than this.  As Ted Butler said on the phone yesterday, the slices off the salami to the downside are getting thinner with each passing day.  There are limits to how low they can get prices...and we may have reached them at 4:00 p.m. EDT yesterday in New York.

And even if they do succeed early next week, the reward for their efforts will be pretty meager.  We'll just have to wait and see what developments await us next week.

The three days of price declines that we've experienced since the Tuesday cut-off for yesterday's Commitment of Trader Report, has probably set new lows in a lot of categories...and if prices remain subdued for Monday and Tuesday, the Commitment of Traders Report this coming Friday should be something to see as well...provided all the data is reported in a timely manner.

A quick glance at any gold or silver chart reveals what may be the classic double bottom formation from a market technician's point of view.  But it wasn't formed by free-market forces.  It was courtesy of JPMorgan et al...as they can, and do, print any chart pattern they please.  I would think we'll find out pretty quick if what they're telegraphing to the market is the real deal or not, as their reaction to the next rally will tell us all we need to know.

(Click on image to enlarge)

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I received an e-mail from reader Stephen Sadd yesterday...and these were his thoughts on the precious metal mining industry..."Why are there no voices coming from the mining sector on the gold and silver take-down? I find it highly remarkable there has been no strong cries of wrong doing from this entity.  Are they just going to sit back like a bunch of zombies while their very own industry gets crushed, not to mention their shareholders. Just disgusting!"

I have other far less charitable words than this that I shall not utter here...but it's sufficient to say that they don't give a damn about you, the shareholder...and as a group they have already circled the wagons against their real owners...us. How did it come to this?

On that happy note, I'm done for the day...and the week.

See you on Tuesday.