Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

Gold didn't do much during the Friday session.  The 'high' of the day came at noon Hong Kong time---and then slid quietly down to its low at the New York open.  From there it rallied back to almost unchanged by 9 a.m. EDT---and then traded quietly sideways for the remainder of the day.

The high and low aren't even worth the effort to look up.

Gold finished the Friday trading session in New York at $1,292.90 spot, down 80 cents from Thursday's close.  But gross volume was over the moon at 233,000 contracts---but net volume was a very tiny 60,000 contracts.

It was more or less the same chart pattern in silver, with the low of the day coming about 10 minutes after the New York open.  From there it rallied a bit, before trading sideways until 3:30 p.m.  It added a few cents going into the 5:15 p.m. electronic close.

Once again the highs and lows aren't worth looking up, as silver traded within a 1 percent range for the entire Friday session.

Silver closed on Friday at $19.475 spot, down a penny from Thursday.  Volume, net of May and June, was 34,000 contracts, with 5,400 contracts of that coming in the September and December delivery months.

Platinum was under selling pressure right from the 6 p.m. open on Thursday evening in New York---and hit its interim low in Zurich just before 2 p.m. Europe time.  The subsequent rally ran into a major seller shortly before noon in New York, with the absolute low of the day coming about 12:30 p.m. EDT.  The subsequent rally didn't get far---and platinum closed down $19 on the day, giving up all Thursday's gains, plus a bit more.  For a quiet Friday trading session, it sure didn't look like ordinary selling.

Palladium didn't do much until shortly after London opened---and then the selling pressure began---and by 11 a.m. in New York the price was back to where it closed on Thursday.  Then came the big out-of-the-blue $10 up/down spike.  From there it traded flat for the remainder of the Friday session and, like platinum, gave up all its Thursday gains.

I don't know about you, dear reader, but the sell-offs in platinum and palladium looked orchestrated to me.  However, you're entitled to your own opinion.

The dollar index closed late on Thursday afternoon in New York at 80.22---and the traded flat until  shortly after the London open.  From there it rallied up to its noon BST high, before sliding a bit going into the New York open.  After that, it didn't do much.

The gold stocks opened flat, but began to slide shortly before 10 a.m. in New York.  Their low tick came around 1:30 p.m. EDT---and the subsequent rally cut the day's losses, as the HUI closed down 0.44%.

It was almost the same chart pattern in the silver equities, with the low also coming at 1:30 p.m. EDT.  But the subsequent rally only cut their losses by a little bit, as Nick Laird's Intraday Silver Sentiment Index closed down another 1.57%.

The CME Daily Delivery Report showed that zero gold and 54 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The two short/issuers were Deutsche Bank and ABN Amro with 38 and 16 contracts respectively.  JPMorgan stopped 42 of them---32 for its in-house [proprietary] trading account---and 10 for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 7:51 p.m. Friday evening, there were no reported changes in SLV, either.

There was a smallish sales report from the U.S. Mint yesterday.  They sold another 5,000 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes---but no silver eagles.  Except for a small 200,000 silver eagles reported on Tuesday, there have been no further silver eagle sales this week.  Both Ted and I are amazed by this---and I'm sure that he will have something to say about it in his Weekly Review this afternoon.

Month-to-date, the mint has sold 28,500 troy ounces of gold eagles---9,000 one-ounce 24K gold buffaloes---3,562,000 silver eagles---and 1,000 platinum silver eagles.  Based on these sales, the silver/gold ratio month-to-date is 95 to 1.  It would have easily been over 100 to 1 if the mint had reported all the silver eagles that it had actually sold this past week.

There was only a smallish amount of activity in gold at the Comex-approved depositories on Thursday.  They reported receiving 3,858 troy ounces of the stuff---and didn't ship any out.  All of it went into Canada's Scotiabank---and I won't bother posting the link.

However, it was another big in/out day in silver, as 794,406 troy ounces were reported received---all into Brink's, Inc.---and 310,938 troy ounces were shipped out.  The link to that action is here.

The Commitment of Traders Report data was a mixed bag.  There was more improvement in silver, along with some deterioration in gold.

In silver, the Commercial net short position declined by 1,837 contracts, or 9.2 million ounces, bringing the Commercial net short position down to 88.0 million troy ounces.  Ted Butler said that the technical funds now hold the largest gross short position in history---and the raptors [the Commercial traders other than the Big 8] are within an eyelash of holding their biggest long position in history.  Ted also pegs JPMorgan's short position at 19,000 Comex contracts, or 95 million ounces of silver which, if you do the math, represents about 108% of the Commercial net short position.  This short position redefines the words "grotesque" and "outrageous".

In gold, the Commercial net short position increased by a smallish 3,689 Comex contracts, or 369,000 troy ounces.  The Commercial net short position now stands at 10.60 million troy ounces.  Ted said that for the second week in a row, it was the actions of JPMorgan that was mostly responsible for capping the gold price, as they sold between 6 to 7,000 of their long-side corner in the Comex gold market---and Ted pegs their now-reduced long-side corner to just under 30,000 contracts, or 3 million ounces.

Here's Nick Laird's now-famous "Days of World Production to Cover Short Positions" of the Big 4 and Big 8 traders in all physically traded commodities on the Comex.

As you are already aware, Friday was a pretty busy day for news in the gold world---and it was for a lot of other things as well.  Add to that the stories I've been saving all week for today's column---and I'm sure I have a record number for you to peruse.  I hope you can find the time in what's left of your weekend to read the ones that interest you the most.

 

¤ Critical Reads

Dinged-up JPMorgan CEO may seek exit: analysts

JPMorgan is on the ropes.

As many as 10,000 more job cuts are on the table this year on top of previously announced layoffs — the brutal result of shrinking business and regulators prowling for blood, The Post has learned.

The latest setbacks at the largest US bank, employing 250,000 worldwide, are so stark, they could force CEO Jamie Dimon to throw in the towel, analysts say.

“It’s just beginning to hit them over the head,” said Nancy Bush, a consultant and strategic adviser at NAB Research. She believes JPMorgan is also caught up in massive global deleveraging, which is shrinking the entire financial system — and it’ll reverberate through trading markets. “Consumers have reduced their debt,” Bush said. “The government leveraged up to fill in that hole and is now going to start deleveraging. There’ll be layoffs at JPMorgan.”

One can only hope that they start with Jamie Dimon.  This news item showed up on The New York Post's website at 5:15 a.m. EDT Friday morning---and I thank reader U.D. for today's first story.

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Hewlett-Packard to Cut 11,000 to 16,000 More Jobs

Hewlett-Packard Co. said Thursday that it aims to cut another 11,000 to 16,000 jobs by October, bringing the total number of planned layoffs to a maximum of 50,000 and nearly doubling the largest payroll reduction ever for the 75-year-old technology giant.

HP's move revises upward a previous target of 34,000 job cuts. In May 2012, eight months after former eBay Inc. CEO Meg Whitman took the reins, HP unveiled the chief executive's initial restructuring plan, which called for a headcount reduction of 27,000.

When the program was first announced, the company had nearly 350,000 employees. As of October, it had 317,500.

Whitman said the extra cuts are being made because the company sees further opportunity to cut costs, not because of a forecast decline in demand.

This AP article from Thursday, appeared on the abcnews.go.com Internet site---and I thank reader M.A. for sharing it with us.

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John Kerry should really try and get some sleep

Even allowing for the fact that John Kerry was playing to the home crowd, his speech to mark the 90th anniversary of US Foreign Service really was a masterclass in 'Diplomacy: How Not To Do It'.

In so many respects this is classic John Kerry. A great lion of international diplomacy who, in his short tenure at State, has tended to roar first, think later. It's a strategy that works well on CNN, or particularly when posturing in the Senate, where Mr Kerry was long-time chair of the Foreign Affairs committee, but it can lead to difficulties on the international stage.

Who could forget John's moving declaration of war speech against Syria last year? It was a masterpiece of oratory, undercut only by Barack Obama going for a stroll around the Rose Garden with his chief of staff and changing his mind – pointedly without telling his Secretary of State.

Of course, knowing pretty much everyone and everything there is to know,  it is understandable that a man of Mr Kerry's experience and destiny should feel no obligation to stick to the script. It is this quality that leaves his officials at State semi-permanently in the "Brace! Brace! Brace!" position, anticipating the moment he next decides to veer off-piste.

This right-on-the-money blog was posted on The Telegraph's website sometime yesterday---and it's the first offering of the day from South African reader B.V.

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Five maps of America's massive drought

The massive drought afflicting the western United States is getting worse.

Half of the mainland United States is facing drier-than-usual conditions, with 15 percent of the country experiencing "extreme" to "exceptional" drought. That in itself is far from unprecedented (it happened in 2012 and 2013, for starters) but it's a significant event.

The real problem, though, is in California, which is facing one of its worst dry spells on record — every single part of the state is now facing "severe" drought or worse. Dry conditions may be one reason why large wildfires are breaking out in California a few weeks earlier than usual. The drought is also hurting the state's crucial agricultural sector.

This very interesting article was posted on the vox.com Internet site on Friday, May 15---and because of content had to wait for today's column.  If you don't read it, you should at least spend a few minutes on the excellent maps.  I thank Casey Research's Bud Conrad for passing this story around on Monday.

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Wall Street has always been corrupt---or about to become corrupted

I finished reading Michael Lewis’ Flash Boys take-down of Wall Street banks, hedge funds, government regulators and high frequency traders last week when I had spare time created by a week-long denial of service attack on my website. It appears to me technology is being utilized more frequently as a mechanism for malevolence rather than a mechanism for good. The smartest guys in the room are figuring out ways to steal you blind in the financial markets, pilfer your personal information, spy on your electronic communications, and censor your right to free speech by taking away your ability to communicate freely on the internet. After reading Lewis’ maddening tome and experiencing the frustration of an attack that reached 50 million hits per day on my website, I’m reminded of two quotes from the brilliant dystopian visionary Aldous Huxley.

Technology has been pushed on the masses like a drug by the mega-corporation and mega-media dealers. Just walk down any city street and observe the technologically entranced zombies shuffling along the sidewalks staring blankly at a tiny screen, tapping away on an itsy bitsy keypad as if whatever they are conveying is of vital importance to the future of mankind. # Give me a break. God forbid if we had to go out in public without our iGadget attached to an appendage. We might actually have to use our brain to think. We might be able to look someone in the eye and smile. We might be able to say hello to a stranger. We might have to act like a human being.

Being connected electronically 24 hours per day is not progress. The technology being peddled to the masses by mega-corporations is designed to keep people amused, apathetic, distracted and uninterested in thinking critically. Our society has devolved into a technologically narcissistic, ego driven, submissive, trivial culture, asphyxiating in a sea of irrelevance and driven by greed and need to fulfill our every desire, rather than a technologically proficient, selfless, humble, critical thinking, civil minded society of self-reliant human beings who take responsibility for their own lives and refuse to saddle future generations with the financial consequences of living beyond their means. Our willful ignorance, misuse of technology, and inability to control our impulses and desires will be the ruin of our perverted civilization.

This longish commentary showed up on theburningplatform.com Internet site on May 13---and I thank reader Mark Hancock for sending it to me on Monday.

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“It’s total moral surrender”: Matt Taibbi unloads on Wall Street, inequality and our broken justice system

His relentless coverage of Wall Street malfeasance turned him into one of the most influential journalists of his generation, but in his new book, “The Divide: American Injustice in the Age of the Wealth Gap,” Matt Taibbi takes a close and dispiriting look at how inequality and government dysfunction have created a two-tiered justice system in which most Americans are guilty until proven innocent, while a select few operate with no accountability whatsoever.

Salon sat down last week with Taibbi for a wide-ranging chat that touched on his new book, the lingering effects of the financial crisis, how American elites operate with impunity and why, contrary to what many may think, he’s actually making a conservative argument for reform. The interview can be found below, and has been lightly edited for length and clarity.

So, what is “The Divide”?

The book is really just about why some people go to jail and why some people don’t go to jail, and “the divide” is the term I came up with to describe this phenomenon we have where there are essentially two different criminal justice systems, one that works one way for people who are either very rich or working within the confines of a giant systemically important institution, and then one that works in another way for people who are without means. And that’s what the book is about.

This interview with Matt was posted on the salon.com Internet site on Monday---and had to wait for a spot in today's column as well.  I thank reader U.D. for his second contribution to today's column.

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William K. Black: How to Rob a Bank [from the inside, that is]

This 18:48 minute TED video was sent to me by Roy Stephens last Saturday---and for obvious reasons had to wait for today's column.  This TED presentation was made last September, but it's just as relevant now [if not more so] than it was back then.  It's definitely worth watching if you have the time.

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International Banking: Shadow and Substance

It would be hard to find a company with a greater sense of tradition than Hall & Woodhouse brewery. Founded in 1777 in the English county of Dorset, it is still based just a few sheep-speckled hilltops from the village where it began. It is also still owned and run by descendants of its founder, Charles Hall (the Woodhouses married into the family in 1847). It has been brewing on the same site, using water from the same wells, since 1900.

The firm’s grand Victorian brewery complex (pictured), with its clock tower, turrets and red-brick smokestack, has been preserved with pride. A museum inside displays ancient brewing equipment, a stuffed badger and sepia-toned pictures of the Halls and Woodhouses of yore, alongside records from Hall & Woodhouse’s earliest days. They show, for example, that on October 22nd 1779 the firm paid a Mr Snook 18 shillings for seven quarters (roughly 90kg) of barley. Even the names of the beers, such as “Fursty Ferret” and “Blandford Flyer” (said to help ward off the insects that plague local fly-fishermen) are steeped in rural nostalgia.

Until this year the firm’s financial arrangements were equally traditional. It never listed its shares or issued a bond. Instead, whenever it needed to finance a big new project, such as the gleaming new brewing facilities that abut the Victorian ones (now converted to offices), it borrowed money from a bank. Given its steady income, its low level of debt and its pristine credit record, it never had any trouble getting a loan, says Martin Scott, the firm’s finance director.

The financial crisis changed all that. When in 2010 Hall & Woodhouse asked its main bank, the Royal Bank of Scotland (RBS), to renew its regular £50m ($84m) line of credit, it got a nasty surprise.

This 15-page special report was posted on The Economist's website on May 10---and is one of the big reads of the day.  I thank Michael Cheverton for sending it to me last Saturday.

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Doug Noland: How the Euro was (Really) Saved

Financial Times (Peter Spiegel): “…Less than a year after that November 2011 night, the existential crisis for Europe’s single currency would, for all intents and purposes, be over. The markets that once threatened to tear the euro apart would be tamed… When the history of the eurozone crisis is written, the period from late 2011 through 2012 will be remembered as the months that forever changed the European project. Strict budget rules were made inviolable; banking oversight was stripped from national authorities; and the printing presses of the European Central Bank would become the lender of last resort for failing eurozone sovereigns.”

There’s a far-reaching contradiction that I fear is going to come back to bite Europe. To “save” the euro, a small cadre of officials, including President Obama, had to impose a more unified and uniform Europe. More rules, restraints and operations dictated from Brussels and Frankfurt; less individuality and sovereignty for citizens, politicians and governments throughout a diverse and unsettled continent. Yet powerful secular forces – in Europe and globally – are pulling persistently in the exact opposite direction: less integration and less cooperation – deeper animosities and separatist proclivities. The perception is of a shrinking pie – an unjust “zero sum game” world – which dictates a more determined struggle to procure one’s share. The jury remains out on European integration and the euro currency experiment – awaiting the outcome of the global monetary experiment.

Friday Putin gave another intriguing speech and responded to a series of pointed questions. Bloomberg went with the market-friendly headline “Putin Says Russia Will Work with Elected Ukrainian President.” I would instead focus on more substantive comments, including the quotes provided above. This man is emboldened and has a message that resonates much more around the world than most in the West are willing to accept. He clearly has friends in Beijing, with a number of “rogue” nations, and likely as well in Brasilia, New Delhi and elsewhere. Putin has his sights focused way beyond Ukraine. He thinks he’s in the process of changing the world. In the U.S., well, we seem overly preoccupied with one heck of a market Bubble.

Friday's Credit Bubble Bulletin from Doug is always a must read for me.  It was posted on the prudentbear.com Internet site on Friday evening sometime---and I thank reader U.D. for sending it along.

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U.K.'s anti-E.U. party makes big gains in local elections

Britain's Eurosceptic UKIP party has made its strongest ever gains in local elections, harnessing discontent with immigration and established politicians to grab support from Prime Minister David Cameron's Conservatives and the opposition Labour party.

The surge by the U.K. Independence Party, which wants Britain to leave the E.U., will pile pressure on Cameron to toughen his stance on Europe and alarm some Conservatives who worry UKIP could scupper their hopes of winning the 2015 national election.

If the trend indicated by partial results is mirrored in elections to the European Parliament, also held on Thursday in Britain, the votes will mark the biggest electoral triumph to date for UKIP's leader, Nigel Farage.

I found this Reuters news item, filed from London late last night BST, embedded in a Zero Hedge article---and I thank reader M.A. for his second offering in today's column.

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Remaining ‘hit list’ Swiss banks sweat over U.S. verdicts

The 13 Swiss banks still under tax evasion scrutiny from the United States Department of Justice (DoJ) have little hope of escaping with a light sentence following the large penalty imposed on Credit Suisse this week. Some relatively big hitters remain on the DoJ hit list.

Zurich Cantonal Bank (ZKB) was named as Switzerland’s third ‘too big to fail’ bank last year owing to its high share of domestic credit it offers to individuals and companies. Basel Cantonal Bank (BKB) plays a vital role in Basel city and canton while Julius Bär, the third biggest Swiss wealth manager, and Pictet are giants in the private banking sphere.

ZKB ceased its US client business at the end of 2011 but not before amassing some CHF1.8 billion in US assets while BKB is thought to have had up to CHF600 million of US money on its books in recent years.

“[The Credit Suisse fine] will serve as a model for the other Swiss bank cases. There’s no basis for calculating the fines, so it’s quite arbitrary on the part of US authorities. So it will surely get more expensive than expected for the rest of the banks,” tax expert Peter V Kunz told swissinfo.ch.

This news item put in an appearance on the swissinfo.ch Internet site very late Thursday morning Europe time---and it's courtesy of South African reader B.V.

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Balkan floods may have undone years of landmine detection

When Mehmedalija Djapic bought his house on the banks of the River Bosna after the 1992-95 war, he had no idea the land around it was laced with landmines.

Fourteen years passed before the de-miners scouring Bosnia detected his minefield and several months ago began the painstaking work of marking it with yellow tape and skull-and-crossbone signs.

In the wake of the worst floods to hit the Balkans in living memory, Djapic's courtyard was packed on Tuesday with rescue teams who fear the work they have done so far was in vain.

Authorities are warning that many of the more than 100,000 remaining landmines dotted across Bosnia have been dislodged by heavy rain, flood waters and hundreds of landslides, shifting beyond the markers.

This very interesting Reuters news item, filed from Karakcije in Bosnia, was posted on their Internet site late Tuesday afternoon EDT---and is another one of the stories that had to wait for today's column.  I thank Roy Stephens for sending it along.

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Russia's gas king taunts crumbling Europe over China pipeline coup

Europe has lost the global scramble for reliable energy supplies and faces a long-term squeeze as Siberian gas is diverted to the fast-growing markets of Asia, Russia's gas chief has warned in scathing comments aimed at EU political leaders.

Alexey Miller, chairman of the state giant Gazprom, said Russia's $400bn deal this week to supply gas to China for 30 years is a black moment for Europe and will change the geo-strategic balance in the world. "The global competition for Russian gas resources started yesterday. Let there be no mistake about that. We have untapped the Asian market and this is going to have an impact on European gas prices," he said.

Mr Miller said the 38bn cubic metres (BCM) contract from 2018 is larger than the entire volume of liquefied natural gas (LNG) sold in the world. "You don't find that sort of contract on the side of the road in Europe," he told the St Petersburg Economic Forum.

Relishing his theme, he said China's gas demand is growing exponentially and would surge past Europe's total consumption to reach 400 BCM in "the very near future" as the Politburo tries to wean its polluted mega-cities off coal-powered plants. A large proportion of this will come from the vast Siberian fields, crowding out supplies for buyers in Europe deemed "less reliable".

This must read commentary by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site at 4:19 p.m. BST yesterday---and I thank Roy Stephens for another contribution to today's column.

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Charles Krauthammer: With a $400-billion gas deal, China and Russia build an anti-Western superpower

On Wednesday, it finally happened — the “pivot” to Asia. No, not the United States. It was Russia that turned East.

In Shanghai, Russian President Vladimir Putin and Chinese President Xi Jinping signed a spectacular energy deal — $400 billion of Siberian natural gas to be exported to China over 30 years.

This is huge. By indelibly linking producer and consumer — the pipeline alone is a US$70-billion infrastructure project — it deflates the post-Ukraine Western threat (mostly empty, but still very loud) to cut European imports of Russian gas. Putin has just defiantly demonstrated that he has other places to go.

The Russia-China deal also makes a mockery of U.S. boasts to have isolated Russia because of Ukraine. Not even Germany wants to risk a serious rupture with Russia (hence the absence of significant sanctions). And now Putin has just ostentatiously unveiled a signal 30-year energy partnership with the world’s second-largest economy. Some isolation.

This commentary by Krauthammer was posted on the National Post website at 2:08 p.m. EDT Friday afternoon---and it's worth reading.  It's also another contribution from Roy Stephens, for which I thank him.

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Putin vs. Comrade Wolf: Showdown in Ukraine

The Ukraine crisis has its roots in a policy that dates back nearly 20 years. The origins of the policy can be traced to a 1997 article in Foreign Policy magazine by Zbigniew Brzezinski, titled “A Geostrategy for Eurasia.” The article makes the case that the United States needs to forcefully establish itself in Central Asia in order to maintain its position as the world’s only superpower. While many readers may be familiar with Brzezinski’s thinking on these matters, they might not know what he has to say about Russia, which is particularly illuminating given that the recent uptick in violence has less to do with Ukraine than it does with Washington’s proxy-war on Russia. Here’s what Brzezinski says:

“Russia’s longer-term role in Eurasia will depend largely on its self-definition…Russia’s first priority should be to modernize itself rather than to engage in a futile effort to regain its status as a global power. Given the country’s size and diversity, a decentralized political system and free-market economics would be most likely to unleash the creative potential of the Russian people and Russia’s vast natural resources. A loosely confederated Russia — composed of a European Russia, a Siberian Republic, and a Far Eastern Republic — would also find it easier to cultivate closer economic relations with its neighbors. Each of the confederated entitles would be able to tap its local creative potential, stifled for centuries by Moscow’s heavy bureaucratic hand. In turn, a decentralized Russia would be less susceptible to imperial mobilization.” Zbigniew Brzezinski, A Geostrategy for Eurasia, Foreign Affairs, 76:5, September/October 1997.

So is this the goal of U.S. policy, to create “A loosely confederated Russia” whose economy can be subsumed into America’s market-based system?

This commentary by Mike Whitney falls into the absolute must read category---especially for any serious student of the New Great Game.  It was posted on the informationclearinghouse.info website on Thursday---and I thank Roy Stephens for sending it.

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Nicholas van Hoogstraten and Mugabe government 'planning coal coup'

Nicholas van Hoogstraten, the British property tycoon notorious for his criminal past and talent to offend, is reportedly set to join forces with Robert Mugabe's government to sack the board of one of Zimbabwe's major coal producers.

Van Hoogstraten is allegedly planning an alliance with mines minster Walter Chidhakwa to shake up the troubled Hwange Colliery Company, where thousands of job losses are feared, South Africa's Mail & Guardian newspaper reported.

The move underlines how the controversial millionaire, who once described Mugabe as "100% decent and incorruptible", remains close to the government of Zimbabwe, where he is now said to be the biggest landowner.

This very interesting, but rather disturbing news item appeared in The Guardian---and was posted on their Internet site at 4:19 p.m. BST on Friday.  This van Hoogstraten character doesn't sound like your garden-variety psychopath if he's buddy-buddy with likes of Mugabe.  I thank reader B.V. for bringing it to our attention.

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Remove rig, Vietnam tells China

China is called on to remove an oil rig deployed illegally in Chinese waters, the Vietnamese National Assembly said Thursday.

The assembly said in a statement the decision by state-run China National Offshore Oil Corp. to deploy rig HD-981 about 120 miles off the coast of Vietnam is a serious violation of its sovereignty and international laws.

"The National Assembly shows its concern and resolutely protests China's violation and wrongdoing and demands that China withdraw the oil rig out of Vietnamese waters," it said.

Both sides have made claims to the maritime territory near the Paracel Islands in the South China Sea. The U.S. government has weighed in saying that, while it has no stance on sovereign claims, China's behavior has been provocative.

This UPI story, filed from Hanoi, was posted on their website very early on Thursday morning EDT---and it's another contribution from Roy Stephens.

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'Country X': WikiLeaks reveals NSA recording 'nearly all' phone calls in Afghanistan

The NSA records almost all domestic and international phone calls in Afghanistan, similar to what it does in the Bahamas, WikiLeaks’ Julian Assange said.

Reports in the Washington Post and the Intercept had previously reported that domestic and international phone calls from two or more target states had been recorded and stored in mass as of 2013. Both publications censored the name of one victim country at the request of the US government, which the Intercept referred to as 'Country X'.

Assange says he cannot disclose how WikiLeaks confirmed the identity of the victim state for the sake of source protection, though the claim can be “independently verified” via means of “forensic scrutiny of imperfectly applied censorship on related documents released to date and correlations with other NSA programs.”

This very interesting news item showed up on the Russia Today Internet site early Friday morning Moscow time---and it's also courtesy of Roy Stephens.

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A Heated Debate: Are Climate Scientists Being Forced to Toe the Line?

After joining a controversial lobby group critical of climate change, meteorologist Lennart Bengtsson claims he was shunned by colleagues, leading him to quit. Some scientists complain pressure to conform to consensus opinion has become a serious hindrance in the field.

News that Lennart Bengtsson, the respected former director of Germany's Max Planck Institute for Meteorology, had joined the Global Warming Policy Foundation (GWPF), sent shock waves through the climate research community. GWPF is most notable for its skepticism about climate change and its efforts to undermine the position of the United Nations Intergovernmental Panel on Climate Change (IPCC). The tremors his decision sent through the scientific community shocked Bengtsson.

The scientist said colleagues placed so much pressure on him after joining GWPF that he withdrew from the group out of fear for his own health. Bengtsson added that his treatment had been reminiscent of the persecution of suspected Communists in the United States during the era of McCarthyism in the 1950s.

This very interesting commentary was posted on the German website spiegel.de at 6:15 p.m. Europe time yesterday---and I thank Roy Stephens for his final offering in today's column.

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Three King World News Blogs

1. Gerald Celente: "This Is Not Going to End Well"  2. William Kaye: "Absolutely Shocking Developments in the War in Gold and Oil"  3. Dr. Paul Craig Roberts: "Putin's Threat Just Stunned U.S. and Europe"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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Barclays fined £26 million for gold price setting failures

Barclays Plc has been fined 26 million pounds for control failings over its setting of gold prices, which occurred just a day after the British bank was fined $450 million for rigging Libor interest rates.

It is the first bank to be fined over attempted gold market manipulation, although a source said the Barclays fine was a one-off case and not part of a wider investigation into gold market price rigging.

It marks another blow to Barclays' attempts to put past problems behind it.

The Financial Conduct Authority said there were failings at Barclays from 2004 until 2013, but the key event occurred on June 28, 2012.

This tiny Reuters story, filed from London at 9:32 a.m. BST [4:32 a.m. EDT] from reader Michael Cheverton, was the first of a deluge of articles on this event, for which I thank all the readers that sent them our way.

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"I Am Hoping For A Mini Puke": Details Of Barclays' Gold Manipulation

Curious how and why commercial bank traders manipulate the price of gold? The following detailed narrative from the Financial Conduct Authority should answer most lingering questions.

On 28 June 2011, Barclays entered into an exotic options contract (the Digital) with Customer A. The Digital was a ‘digital’ option, meaning it had only two potential values: (i) a fixed pay-out to Customer A if the option finished ‘in the money’; or (ii) no pay-out if the option finished ‘out of the money’. In order to determine whether a digital option finishes in or out of the money, reference is usually given to the price or level of an agreed investment or benchmark on a specified date, known as the observation date.

The Digital had a notional amount of approximately USD43m and upon the signing of the contract, Customer A paid a premium of 8.18% of the notional value, USD4.4m, to Barclays, of which a proportion was attributed as a profit to Mr Plunkett’s book. The Digital had two observation dates, 28 June 2012 and 20 June 2013, and referenced the price fixed during the 3:00 p.m. Gold Fixing on each of these dates.

Under the terms of the Digital, if the price fixed in the 28 June 2012 Gold Fixing exceeded USD1,558.96, the Barrier, a payment of 9% of the notional amount, or approximately USD3.9m, would accrue to Customer A. If the price fixed during the 20 June 2013 Gold Fixing exceeded USD1,633.91, a payment of 18% of the notional amount would accrue to Customer A, less any accrued percentage payment related to the 28 June 2012 Gold Fixing.

This is the blow-by-blow description of what happened---and how.  This is another Zero Hedge piece.  This one was posted on their website yesterday morning at 09:15 a.m. EDT---and the first copy I got was from Manitoba reader Ulrike Marx.

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Caught Red-Handed: This Is What Zoomed In Gold Manipulation Looks Like

Now that gold manipulation is no longer conspiracy theory and has joined every other "tinfoil" narrative into the realm of conspiracy fact, we urge readers to catch up on both what was the story of the day, namely the UK regulator cracking down on exactly one (1) Barclays trader for manipulating the gold price in a way that prevented him from paying out a substantial fee to his counterparty (and also being the absolutely only person in all of Barclays and every other bank to manipulate gold, of course), as well as reading the full explanation of just how said manipulation was conducted.

Failing that, one can simply observe the following pretty charts catching Daniel James Plunkett smashing the price of gold, which apparently in the UK is called a "mini puke", red-handed in the act of what is now confirmed gold manipulation.

Courtesy of Nanex, the charts below show the active Gold Futures contract on June 28, 2012 during the London afternoon gold fixing (3pm London time, 10am Eastern Time), which is when we now know the Barclays trader intentionally manipulated the price lower.

This short, but must read Zero Hedge news item---with lots of pretty charts---was posted on their Internet site at 7:20 p.m. EDT Friday evening.  I know you won't believe it, but I found it all by myself!

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Notes on the Barclays gold manipulation case: Enough money can rig ANY market

It would be far more interesting if the market regulatory agencies in the United States, the U.K., and E.U. put to their own governments the sort of trading questions that have just been put to Barclays. But this won't happen because, at least in the United States, the government is fully authorized by law to trade surreptitiously in any market---and because the central bank has the authority to monetize infinite government and private debt, to purchase infinite assets, and to rig the gold price.

As market rigging by the government is fully contemplated by law, the only thing to be done about it is to expose it. The British Financial Conduct Authority's action against Barclays for manipulating the gold market is welcome mainly for establishing that gold market manipulation is not mere "conspiracy theory" and for potentially making it a little harder for governments to rig the gold market surreptitiously with the cover of intermediaries.

Of course if governments ever have to rig the gold market in the open, as they used to do, investors and gold-producing countries at last may understand that there are no markets anymore, just interventions, and may decline to be cheated as much.

This excellent commentary by GATA's secretary/treasurer Chris Powell was posted on the gata.org Internet site yesterday---and it's worth reading as well.

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Gold Bull Kaplan Eyes First Fund for Outside Investors

One of the biggest believers in gold is prospecting for outside investors after seeing the value of his personal holdings cut sharply in the metal's steep fall.

New York investor Thomas Kaplan is looking to raise $500 million for a private-equity-style fund to make more bets on gold and other precious metals, say people familiar with the matter and a marketing document that The Wall Street Journal viewed.

The fund would mark Mr. Kaplan's first launched with money from outside his family, though his firm, the Electrum Group, has a few large outside investors.

This Wall Street Journal article from yesterday was sent to me by reader Ken Hurt---and it's a freebie from their website.  I can read it fine---and I hope you can as well.  If you can't, there's nothing I can do about it.

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Jeff Clark: Get One Foot Outta Dodge

One of the most popular questions we are asked is why, how, or where to store bullion internationally.

The volume and sophistication of the questions we receive highlights the concern many of us have about aggressive governments, whether it's capital controls or outright confiscation.

For years, government efforts (especially in the US) have discouraged the use of "offshore" accounts by expanding reporting requirements, accompanied by stiff fail-to-file penalties. Despite the disinformation and scare tactics, we found cost-effective, reputable, and secure facilities to store gold beyond the easy grab of Uncle Sam. They're 100% legal, and compliance is easier than advertised.

These non-bank offshore gold storage services check all our due diligence boxes and yield a layer of asset protection and peace of mind that only international diversification can provide.

This commentary by BIG GOLD senior editor Jeff Clark, showed up on the internationalman.com Internet site yesterday---and it's worth your time.

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LBMA Receives Over 250 Responses So Far On Alternative To Silver Fixing

The London Bullion Market Association said Friday it has received more than 250 responses so far as part of its “market consultation” process on developing a new mechanism for the London silver fixing, and it will continue an online survey until May 30.

The London Silver Market Fixing Limited said earlier this month that it will stop administering the London silver fixing after Aug. 14. Until then, the organization said, Deutsche Bank, HSBC and Bank of Nova Scotia will continue to administer the benchmark price-setting mechanism.

The LBMA quickly stepped forward in looking for feedback for an alternative and launched an online market survey last week.

Those who want to take part can click here to access the online survey.

This silver-related news item appeared on the kitco.com Internet site at 10:00 a.m. EDT on Friday morning---and I thank Ulrike Marx for finding it for us.

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Parties encouraged by common commitment to resolve platinum dispute

The Labour Court-facilitated mediation of ongoing conflict between platinum producers Anglo American Platinum, Impala Platinum and Lonmin and the Association of Mineworkers and Construction Union continued on Friday with the parties encouraged by the “common commitment to endeavour to resolve this dispute”, Lonmin said in a statement.

The platinum miner said on Friday that the process, which started on Wednesday, was unfolding and that AMCU and the platinum producers welcomed the initiative of the Labour Court to mediate a resolution of the protracted wage strike in the sector.

“The parties have fully embraced this process with talks led by Judge Hilary Rabkin-Naicker,” Lonmin said.

This tiny story, filed from Johannesburg, was posted on the miningweekly.com Internet site sometime yesterday---and it's the final offering of the day from reader B.V.

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Palladium scrap supply dips as junkyards await higher prices

U.S. scrap palladium supplies tightened as junkyards, hoping to capitalize on higher prices, held onto used auto catalytic converters, fueling fears about a widening deficit as strikes in major producer South Africa dragged on, recyclers said.

Falling supplies of spent autocatalysts, by far the biggest source of palladium after mine output, come as heightened geopolitical tensions in Russia and South Africa's longest-ever strike reinforce concerns about a widening deficit. The two countries are the world's top two producers.

"At least in the short term, the strikes in South Africa may be prompting some scrap dealers to hold back their shipments of autocats in the belief that higher prices are inevitable," said Greg Roset, manager of smelting and recycling at Stillwater Mining Co.

Well, dear reader, higher prices in palladium would be inevitable if '3 or less' U.S. banks weren't sitting on a short-side corner in the metal.   Check out Nick's "Days to Cover" chart in the first section of today's column. This very interesting Reuters story found a home on the mineweb.com Internet site yesterday---and I thank Ulrike Marx for providing today's last story.

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¤ The Funnies

The next photo from my trip was taken about 1 kilometer from the photo of the wild turkey that I posted in yesterday's column.  This is a male American robin in full breeding plumage. The second photo is of a Black-tailed prairie dog---and it was taken in the South Unit of Theodore Roosevelt National Park in western North Dakota.

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¤ The Wrap

The strongest factor pressuring the 8 big shorts to cover is the coming physical silver shortage. Let a physical silver shortage emerge (again, as was the case in early 2011) and these 8 shorts will rue the day they ever heard the word “silver.” That’s because if a silver shortage hits and the concentrated short position exists to the extent it exists now, it will be doomsday for the shorts. - Silver analyst Ted Butler: 21 May 2014

Today's pop "blast from the past" is by an American group that has spanned the "entire musical genre" during its long existence.  This particular R&B number is from 1979---and if you haven't heard this song before, you'll be one of the few people that hasn't.  The link is here.

Today's classical "blast from the past" is a short piano work by Franz Liszt, which everyone on Planet Earth has heard several times in various iterations during their lives.  Lang Lang does the honours---and the link is here.

As I pointed out at the top of this column, there wasn't much price activity in either gold or silver, but there sure was a lot of volume---especially in gold.  The preliminary report for Friday from the CME showed that about 27,000 gold contracts disappeared out of the June delivery month, so that's a pretty good start to the roll-overs, as all traders, expect those standing for June delivery, have to be out by the end of Comex trading next Thursday.

Here are the 6-month charts for both gold and silver once again.  As you can see in gold, and as I mentioned in yesterday's missive, the 50-day moving average [which is ruler flat] is being vigorously defended, although it was never an issue during the Friday session.  Silver closed above its 20-day moving average once again, but not by a material amount.

The rubber band in silver is pretty much stretched to the limit with the data that was contained in this week's COT Report---and I wait with great interest to see how this situation resolves itself.  At some point the technical funds will begin to cover---and it will be fascinating to watch if the raptors sell enough longs to cap the price as they begin to take profits.  If they don't, will JPMorgan et al and the other seven traders in the 'Big 8' category [as short sellers of last resort], dig themselves a deeper hole by adding to their already obscene and grotesque short positions?  The answer to that question will determine how high---and how fast---the silver price rises when the next rally begins.

I was happy to see that somebody on the inside [the first cockroach of many] finally got caught rigging the gold price for their own personal benefit.  But that, as many have said, is just the tip of the proverbial iceberg.  As Zero Hedge so succinctly put it in this article posted further up in the Critical Reads section:

"It would appear that Plunkett is indeed nothing more than another instance of "Kerviel" or "Tourre" - an irrelevant mid-level trader thrown at the wolves of public consumption just so the attention can be redirected from the real manipulation elsewhere, and much higher up.

"By handing Plunkett to the public on a silver platter, it simply means that the far bigger and more important players in the gold manipulation market - stretching all the way to central bank and, of course, bank of central bank level, will simply be allowed to continue business "as usual."

"So for those who want the real people behind the real manipulation before they all scatter into the dust, we urge you to reread "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold." Because the gold manipulation rabbit hole goes far, far deeper than just one single, solitary trader.

That, dear reader, is exactly correct---but this is a good first start, and I'm sure there will be other cases of "banging the fix"---or banging away at any other time of day, for that matter---before this is all said and done.

For the very last time, I'd like to remind you once again that Casey Research has a limited-time offer [it ends at midnight EDT on Monday] on their Casey Extraordinary Technology subscription service.  Alex Daley is all pumped up about the successes they've had over the last year, with an average return of 47%.  The commentary is rather provocatively headlined "Gold is Dead: Long Live Tech".  It costs nothing to check it out, which I urge you to do when you have a spare minute.  The link is here---and Casey Research is now providing a 6-month guarantee of customer satisfaction with this offer.

That's all I have for the day---and the week.  Enjoy what's left of your weekend---and I'll see you here on Tuesday.