Gold & Silver Daily

¤ Yesterday In Gold & Silver

Looking at the gold chart below, it appears like a lot happened, but in reality not much did.  The price crawled higher in Far East trading until London opened on their Friday morning---and then it got sold down into the noon London silver fix.  From there it rallied until just after the London p.m. gold fix, followed by a small sell-off into the the 1:30 p.m. COMEX close.  From there it traded generally flat.

The low and high ticks were reported by the CME Group as $1,222.50 and $1,234.90 in the April contract.

Gold finished the Friday session in New York at $1,227.90 spot, up $6.20 from Thursday's close.  Net volume was on the lighter side once again at 90,000 contracts.

Silver's price action was a little more interesting.  Like gold, the silver price crawled higher until London opened---and by 11 a.m. GMT, it was back to basically unchanged on the day.  A rally of sorts began at that point---and really took off ten minutes after the 8:20 a.m. EST COMEX open.  That rally ran out of gas/got capped shortly after the London close---and from there got sold down a bit going into the COMEX close.  Then, also like gold, it didn't do much into the 5:15 p.m. close of electronic trading.

The low and high were recorded as $16.835 and $17.43 in the March contract.

Silver finished the day at $17.32 spot, up 48.5 cents.  Not surprisingly, net volume was pretty decent at 37,000 contracts---and there's no way of knowing whether that rally was short covering or something else.  I suspect the former, but one thing I do know for sure is that it was all paper games on the COMEX---and supply and demand weren't factors.

And except for a double top after the London p.m. gold fix, the platinum price chart was a duplicate of the gold chart in every other way.  Platinum finished the Friday session at $1,205 spot---and up 8 dollars from Thursday.

In most respects, the palladium price followed a similar pattern to platinum, except the double top in that metal came long after the London p.m. gold fix was done for the day.  Palladium finished the day at $788 spot, up an even 15 bucks from Thursday's close.

The dollar index closed late on Thursday afternoon in New York at 94.18.  It fell as low as 93.90 around 2 p.m. Hong Kong time, before recovering to it 94.31 high around 8 a.m. EST.  It fell below the 94.00 mark again at the 10 a.m. EST London gold fix, but "recovered" into the close.  The index finished the day at 94.16--basically unchanged from Thursday's close.

However, an honest assessment of the chart below would be that the dollar index wanted to die a couple of times yesterday---and that was the third move below the 94.00 mark in less than twenty-four hours.  It appeared that "gentle hands" were at the ready every time.

Here's the 3-day chart so you can see what I mean.  Note that the 95.00 level was broken on Wednesday---and 94 would have followed on several occasions shortly after that if the powers-that-be hadn't intervened.

The gold stocks opened higher, but began to roll over shortly after 11 a.m. EST---and continued to slide for the remainder of the day.  The HUI closed up only 0.31 percent.  I was underwhelmed.

The silver equities topped out the same time as the price rally in that metal ended, which was at, or minutes after, the London p.m. gold fix.  They sold off until around noon---and then chopped sideways into the close.  Nick Laird's Intraday Silver Sentiment Index finished up only 1.34 percent---and I must admit I was expecting more than this, considering how well the price did.  But we got a bigger rally in the silver equities on Thursday than was warranted, so I guess that evens things out---sort of.

For the week, the HUI was down 1 percent---and Nick's Intraday Silver Sentiment Index closed up 3.43 percent.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  With only eight delivery days left in February, one has to wonder how long the remaining short/issuers in gold are going to hold out before they put the metal up for the long holders.  The have absolutely nothing to gain by holding back.

The CME Preliminary Report for the Friday trading session showed that gold open interest in February dropped by 50 contracts yesterday, leaving 601 contracts still open.  In silver, another 20 contracts were added, bringing the February open interest up to 56 contracts.

For the second day in a row there was a withdrawal from GLD.  This time it was 104,502 troy ounces.  And as of 6:46 p.m. EST yesterday evening, there were no reported changes in SLV.

The U.S. Mint had a small sales report. They sold 62,000 silver eagles---and that was all.

Month-to-date the mint has sold 9,000 troy ounces of gold eagles---6,000 one-ounce 24K gold buffaloes---and 1,524,500 silver eagles.  Based on these sales, the silver/gold ratio works out to 101 to 1.

No matter how you slice it or dice it, U.S. Mint sales, particular in gold, are just short of horrible---and the month is half gone already.  Speaking from first-hand knowledge, I can tell you that retail sales are just crawling along the bottom---and if I were you, I'd check the credibility of anyone who says differently.

Over at the COMEX-approved depositories on Thursday, there was no gold movement worth mentioning, as only 2 kilobars got shipped out of the Manfra, Tordella & Brookes, Inc. depository.

Things were much busier in silver, though---as 931,445 troy ounces were reported received---and 157,419 troy ounces were shipped out.  The link to that activity is here.

The Commitment of Traders Report for positions held at the close of Tuesday trading were not as good as I was expecting/hoping they would be in silver, but the numbers in gold were better than either Ted or myself were expecting.

In silver, the Commercial net short position only declined by 2,742 contracts, or 13.7 million troy ounces.  The Commercial net short position is now down to 267.3 million troy ounces, which is still a monstrous number.

I know that Ted was expecting around a 5,000 contract improvement---and even I was expecting that amount, plus more---but since the 50-day moving average wasn't penetrated to the downside, that was certainly a contributing factor if you were trading silver from a technicians point of view in the Managed Money category.

While on the subject of Managed Money, they added 1,603 contracts to their short position---and the non-technical fund traders used the sell-off to add 648 long contracts to their already huge long position in that category.

Ted pegs JPMorgan's short position at 21,000 contracts, or 105 million troy ounces.

In gold, there was a huge change, as both the 200-day and 50-day moving averages were taken out with authority during the reporting week.  Ted guessed at least a 20,000 contract improvement---and it came in at 32,682 contracts, or 3.27 million troy ounces.  The Commercial net short position is now down to 17.06 million ounces, which is still a horridly high number---and still in the "heavy danger" zone.

In the Managed Money category, the traders dumped 26,475 long contracts---and added 2,314 contracts to their short position as well.  The Commercial traders were standing buy to gobble up the other side of every trade.

Since the Tuesday cut-off, there may have been a bit more improvement in the Commercial net short position in gold---but if there was, it wasn't much.  In silver, all the gains from last week, probably vanished in yesterday's rally, unless it was short covering which, based on the volume, is highly doubtful.

And as Ted Butler said in a reply to a reader's comment in his mid-week column:  "When the speculators/technical funds buy and commercials/banks sell, gold [and silver] prices always go higher. Always. When the speculators sell---and commercials buy, prices always go lower. Always." --- "The speculators and technical funds which bought aggressively on the way up, have now started to sell in reaction to the lower prices (engineered by the commercials). As always, the commercials are buying the contracts being sold by the speculators as this is the very essence of the market manipulation."

I must admit that I was surprised by yesterday's rallies, but doubt very much if they will last considering the current size of the short positions of the Big 8 traders in both metals.  Of course if these same traders decide they're going to go back on the short side by an even larger amount than they are now, then all bets are off to the upside.

So we await developments.

Here's Nick Laird's chart showing the weekly withdrawal from the Shanghai Gold Exchange---and for the week ending Friday, February 6---another 59.327 tonnes were taken out.  A serious amount of gold has been withdrawn from the SGE since the beginning of the year.  Koos Jansen has a story about that in the Critical Reads section---and if you can't wait, the link is here.

I have a lot of stories for you today, including quite a few that I've been saving for Saturday's column---and I hope you have time in what's left of your weekend to read the ones that interest you.


¤ Critical Reads

Global Deflation Exports to U.S. Send Import Prices Tumbling Most Since Lehman

Import prices dropped 8.0% YoY (modestly beating expectations of an 8.9% plunge) and 2.8% MoM. The last time import prices started to fall at this pace was a month after Lehman Brothers BK'd. Of course the crash of oil prices is largely responsible as imported fuel costs slumped 16.9% YoY - the most since Dec 2008 (petroleum -17.7%). However, even away from that the price of imported capital goods collapsed the most since March 2009 with the biggest rise in Japanese (foreign central banks) exported deflation since April 2013 (when QE really accelerated).

This short Zero Hedge article contains three excellent Bloomberg charts---and is worth a look.  I thank Dan Lazicki for today's first news item.


IRS to pay back-refunds to illegal immigrants who didn’t pay taxes

IRS Commissioner John Koskinen told Congress on Wednesday that even illegal immigrants who didn’t pay taxes will be able to claim back-refunds once they get Social Security numbers under President Obama’s temporary deportation amnesty.

The revelation — which contradicts what he told Congress last week — comes as lawmakers also raised concerns Mr. Obama’s amnesty could open a window to illegal immigrants finding ways to vote, despite it being against the law.

“While we may disagree about whether your deferred action programs were lawfully created and implemented, we are confident that we can all agree that these programs cannot be permitted to impair the integrity of our elections,” Republican members of Congress from Ohio wrote in a letter to Mr. Obama Wednesday, ahead of a hearing on the issue in the House on Thursday.

Mr. Obama’s new deportation policies, which carve most illegal immigrants out of danger of being removed, and could proactively grant as many as 4 million illegal immigrants work permits and Social Security numbers, are increasingly under fire for ancillary consequences such as tax credits and competition for jobs.

Wow!  You couldn't make this stuff up!  This news item showed up on The Washington Times website on Wednesday---and it's courtesy of Brad Robertson.


Republicans seize on HSBC scandal to hold up Loretta Lynch's confirmation

Senate Republicans are seizing on the global tax scandal engulfing HSBC to delay the confirmation of Loretta Lynch, Barack Obama’s nominee for attorney general, the Guardian can reveal.

The Republican chairman of the Senate judiciary committee, Chuck Grassley, was on Friday preparing a fresh tranche of questions for Lynch about the huge cache of leaked data showing how HSBC’s subsidiary helped conceal billions of dollars from domestic tax authorities.

Grassley and another Republican senator are planning to investigate whether Lynch could have done more to stand up to the world’s second largest bank.

Lynch negotiated a controversial settlement with HSBC in 2012, after the bank admitted to facilitating money-laundering by Mexican drug cartels and helping clients evade US sanctions.

This absolute must read story---especially about the HSBC global scandal part---appeared on Internet site at 10:25 p.m. GMT yesterday evening---and I thank Harry Grant for sliding it into my in-box just after midnight Denver time.


Here's a $9 Trillion Question

When Group of 20 finance ministers this week urged the Federal Reserve to “minimize negative spillovers” from potential interest-rate increases, they omitted a key figure: $9 trillion.

That’s the amount owed in dollars by non-bank borrowers outside the U.S., up 50 percent since the financial crisis, according to the Bank for International Settlements. Should the Fed raise interest rates as anticipated this year for the first time since 2006, higher borrowing costs for companies and governments, along with a stronger greenback, may add risks to an already-weak global recovery.

The dollar debt is just one example of how the Fed’s tightening would ripple through the world economy. From the housing markets in Canada and Hong Kong to capital flows into and out of China and Turkey, the question isn’t whether there will be spillovers -- it’s how big they will be, and where they will hit the hardest.

This Bloomberg article, complete with a 2:03 minute must watch video interview with Jim Rickards, was posted on their Internet site at 10:00 p.m. Thursday evening Denver time.  In the video clip, Jim says that "The Fed, theoretically, can never raise rates"---which is something he's been saying for at least a year already.  It's the first offering of the day from Roy Stephens.


Declinists Be Damned: Bet on America

Reader Karen Brown sent this very long 1 hour 43 minute video debate my way yesterday---and here's what she had to say about it.

"Here's a great debate that was staged on February 11 by Intelligence Squared with Jim Rickards and your own Canadian member of parliament, Christa Freeland, on the "right" side of the table.

The best soundbites are from Christa:  "The highest form of patriotism is to see clearly what is happening in your country." -- "America is failing Americans". [I would have to add, as an American, we are failing the world. - Karen]

From Jim: "You're entitled to your own opinion, you're not entitled to your own facts."

Jim's summation, starting at 1:26:30, is outstanding---and for sure music to your ears.  "As long as America is a country where innocent bystanders are getting smashed and stripped---and bankers are being left alone, America is in decline." [Jim specifically singles out JPMorgan as "the most corrupt enterprise in history"---along with the other big New York banks. - Ed] It's worth listening to that part alone just to hear him say those words.

"I give the "For" side a grade of D for failing to address the actual premise of debate, i.e., is America in decline as compared to itself, and a final grade of F for continuing to miss the point even after being corrected by the moderator. And I fail the voting audience for the same reason."

"The fact that the debate team and the audience were not sufficiently analytically trained to correctly address the debate motion is in itself a point in favor of the "Against" side."


Doug Noland: Store of Value

After six years of unprecedented central bank monetary measures, the end is still nowhere in sight.  The highly abnormal has become the enduring normal.  Indeed, the global monetary backdrop gets crazier by the week – and everyone’s fine with it.  Federal Reserve policy making is now celebrated as an indisputable success – testament to what injecting $3.6 Trillion of new “money” into securities markets can accomplish.  And each week the world seems a bit closer to coming completely unglued.

By now, many should view “modern monetary systems” with deep concern.  But record securities prices – and market exuberance - provide powerful palliative.  They clearly ensure that the widening cracks in the global financial system go unnoticed.  The inflationists have at this point succeeded fully in convincing everyone that deflation is the greatest risk to mankind. Meanwhile, the “store of value” issue festers.  Gangrene is apparent at some extremities, as central bank “money printing” (as far as the eye can see) holds a crisis of confidence in global “money” and Credit at bay.  Still, global policymakers won’t be able to create new debit and Credit electronic journal entries and convince folks it’s real wealth forever.

There will be no separating economics from politics – monetary management from ideologies.  But could we at least debate the issue of sound money and Credit without resorting to partisan demagoguery. Considering what’s at stake, it’s so pathetic it’s embarrassing.

Doug's weekly Credit Bubble Bulletin is always a must read for me---and I thank reader U.D. for sending it my way before I got around to digging it up myself.


The U.S. government wouldn't rig markets this way anymore, would it?

Robert Wenzel of the Economic Policy Journal notes that the Federal Reserve Bank of Cleveland has withdrawn its posting of and publicity for a 2011 study by the economists Michael D. Bordo, Owen F. Humpage, and Anna J. Schwartz that is critical of the U.S. government's increasingly frequent intervention in the currency markets from 1962 to 1973:

But Wenzel also notes that the Cleveland Fed's removing the study from its Internet site has not suppressed it, since a very similar version of it was published by the National Bureau of Economic Research, for which Schwartz worked.

"Take this as an object lesson," Wenzel writes. "The Fed does intervene in markets during crisis periods and it is very likely that the definition of 'crisis' has broadened since the 1960s to cover a lot more than assassinations of U.S. presidents."

This is your big read of the day/weekend/next week.  It's big enough that you'll probably have to read it in installments, as it runs 88 pages.  Phil Barlett pointed out this news item, I sent it to Chris Powell on Thursday evening---and this GATA release is the result.  It also appeared over at the Zero Hedge website yesterday with the headline "Fed Links to Paper Extremely Critical of Monetary Intervention... Then Pulls Link"---and that was courtesy of Phil Barlett as well.


In Canada too, clamor for the banks to get out of the governing business

What's left of Canada's Social Credit movement has brought a lawsuit challenging the operation of the country's monetary and banking systems, and apparently the powers that be are having a hard time getting the lawsuit dismissed.

The lawsuit argues that the Canadian central bank's enabling act authorizes the bank to create and lend money without interest to government agencies, bypassing the commercial banking system and all the income and advantages commercial banks extract from the central bank at the public's expense, and that the central bank should start financing the government that way.

Reporting on the lawsuit at the Internet site of the Clifford Hugh Douglas Institute, which expounds Social Credit political and economic philosophy, M. Oliver Heydorn writes:

"The plaintiffs state that the Bank for International Settlements, the Financial Stability Forum, and the International Monetary Fund were all created with the cognizant intent of keeping poorer nations in their place, which has now expanded to all nations in that these financial institutions largely succeed in overriding governments and constitutional orders in countries such as Canada over which they exert financial control. The plaintiffs state that the meetings of the BIS and Financial Stability Board (successor of FSF), their minutes, their discussions, and their deliberations are secret and not available nor accountable to Parliament, the executive, nor the Canadian public, notwithstanding that Bank of Canada policies directly emanate from these meetings. These organizations are essentially private, foreign entities controlling Canada's banking system and socio-economic policies."

Ain't that the truth!  This story is embedded in a GATA release from Tuesday---and for content reasons, had to wait for today's column.  It's worth reading.


Nicaragua Constructs Enormous Canal, Blind to its Environmental Cost

The Nicaragua Grand Canal will be a project of unprecedented magnitude. The canal’s route has already been determined, as is the number of ships that will be permitted to pass through it each day. Also decided is who will construct the canal and how many square kilometers of earth must be moved. What remains unknown is the environmental impact of this potential new slice through Central America. Nicaragua’s government proposed the project and put the construction of the canal into the hands of Hong Kong Nicaragua Canal Development (HKND), all without soliciting any environmental studies. And now the government claims construction has started.

Nicaragua President Daniel Ortega sees the canal as positive not only for the country, but for the all of Central America. He has said nothing, however, about the lack of an environmental impact review. “Today we are a region where we defend the principle of it is no coincidence that this work begins when in our America we have managed to make this great historical leap toward the integration and unity of our people and our entire region,” Ortega said hours before marking what he called the beginning of construction on December 22, 2014.

This very interesting and  rather short essay appeared on the Internet site on Wednesday---and it's definitely worth reading.  I thank reader U.D. for passing it around.


The fiddling with temperature data is the biggest science scandal ever

When future generations look back on the global-warming scare of the past 30 years, nothing will shock them more than the extent to which the official temperature records – on which the entire panic ultimately rested – were systematically “adjusted” to show the Earth as having warmed much more than the actual data justified.

Two weeks ago, under the headline “How we are being tricked by flawed data on global warming”, I wrote about Paul Homewood, who, on his Notalotofpeopleknowthat blog, had checked the published temperature graphs for three weather stations in Paraguay against the temperatures that had originally been recorded. In each instance, the actual trend of 60 years of data had been dramatically reversed, so that a cooling trend was changed to one that showed a marked warming.

This was only the latest of many examples of a practice long recognised by expert observers around the world – one that raises an ever larger question mark over the entire official surface-temperature record.

The powers-that-be in the global warming/climate change arena will stop at nothing to make sure their agenda goes through, even if it involves record falsification along with outright lying.   This must read story showed up on the Internet site at 10:15 p.m. GMT last Saturday---and had to wait for this Saturday's column.  The first reader through the door with it was Michael Cheverton---and I thank him.  And in case you've forgotten about the "Climategate" scandal from five years ago, here's Rex Murphy to remind you at this must watch link.


Global warming skeptics know more about climate science

Are global warming skeptics simply ignorant about climate science?

Not so, says a forthcoming paper in the journal Advances in Political Psychology by Yale Professor Dan Kahan. He finds that skeptics score about the same (in fact slightly better) on climate science questions.

The study asked 2,000 respondents nine questions about where they thought scientists stand on climate science.

On average, skeptics got about 4.5 questions correct, whereas man-made warming believers got about 4 questions right.

One question, for instance, asked if scientists believe that warming would “increase the risk of skin cancer.” Skeptics were more likely than believers to know that is false.

Skeptics were also more likely to correctly say that if the North Pole icecap melted, global sea levels would not rise. One can test this with a glass of water and an ice cube – the water level will not change after the ice melts. Antarctic ice melting, however, would increase sea levels because much of it rests on land.

This interesting article put in an appearance on the Internet site on Wednesday sometime---and I thank reader M.A. for finding it for us.


E.U.'s Tusk: No proof Europeans fighting in Ukraine, refutes Croatia's claim

EU citizens fighting in Ukraine is propaganda rather than reality, declared the president of the European Council. Croatia’s FM confirmed earlier that citizens of that EU member state had joined Kiev troops to fight rebels in Ukraine’s east.

The presence of Europeans among the ranks of the warring parties is not a major problem, whereas Russia’s goodwill is essential for implementation of the Minsk agreement, President of the European Council Donald Tusk told a press conference after an EU summit, as cited by RIA Novosti. Tusk stressed that this is his personal appraisal.

“We have no evidence that citizens of European countries are engaged in fight in eastern Ukraine. It's my assessment and my intuition but I think it is rather propaganda today than fact,” Tusk said. “For sure this is not the main problem ...”

Earlier this week, Croatia’s top diplomat acknowledged the presence of volunteers from his country in the conflict zone in Ukraine.

This news item showed up on the Russia Today Internet site at 11:03 a.m. Moscow time on their Friday morning, which was 3:03 a.m. in New York.  I thank South African reader B.V. for his first contribution to today's column.


Nuclear Specter Returns: 'Threat of War Is Higher than in the Cold War'

The scientists had no idea that their experiment could spell the end of civilization. On Jan. 25, 1995, Norwegian and American researchers fired a rocket into the skies of northwestern Norway to study the Northern Lights. But the four-stage rocket flew directly through the same corridor that American Minuteman III missiles, equipped with nuclear warheads, would use to travel from the United States to Moscow.

The rocket's speed and flight pattern very closely matched what the Russians expected from a Trident missile that would be fired from a U.S. submarine and detonated at high altitude, with the aim of blinding the Russian early-warning system to prepare for a large-scale nuclear attack by the United States. The Russian military was placed on high alert, and then President Boris Yeltsin activated the keys to launch nuclear weapons. He had less than 10 minutes to decide whether to issue the order to fire.

Yeltsin left the Russian missiles in their silos, probably in part because relations between Russian and the United States were relatively trusting in 1995. But if a similar incident occurred today, as US arms expert Theodore Postol warned recently, it could quite possibly lead to nuclear catastrophe.

"Five or six minutes can be enough time, if you have trust, if you have communication and if you can put this machinery immediately to work," former Russian Foreign Minister Igor Ivanov said on the sidelines of last weekend's Munich Security Conference. Unfortunately, he argued, this machinery works very poorly today, and there is great mistrust.

This article showed up on the German website at 2:31 p.m. Europe time on their Friday afternoon---and it's courtesy of Roy Stephens.  The above headline is new.  The old headline read "Munich Conference Warns of Greater Threat of Nuclear Conflict"


German coal imports from Russia highest since 2006

Germany imported more than 12 million tons of coal from Russia in 2014 - the biggest volume in 9 years, despite calls for energy independence and a switch to renewables.

Coal imports from Russia increased 6.6 percent in 2014, at 12.6 million metric tons, Germany’s Federal Statistics Office reported Friday. This is about a third of the country’s total coal imports.

At a time when geopolitical relations between the two countries are strained, Germany continues to pump money into a country that the US and other European countries are bent on economically isolating.

Poland, also a Moscow naysayer, is Russia’s second biggest coal importer in the EU.
Another country that had sworn off Russian coal, but ended up buying the cheap energy to heat homes and factories, was Ukraine. Kiev bought some 50,000 metric tons in December.

This interesting article appeared on the Russia Today website at 5:42 p.m. Moscow time yesterday---and it's the second story in a row from Roy Stephens.


The Minsk 2.0 Agreement: The useless agreement which everybody wanted

I have to say that I am both amused and appalled at the completely over-the-top reaction of most commentators to what we might as well call the Minsk-2 Agreement (M2A).  Apparently, analysis has been abandoned altogether and has now been replaced with hyperbole and vociferous but empty statements.  Reading some of the comments made here one could be forgiven for thinking that somehow the war in the Ukraine was over and that the Anglo-Zionist Empire, aided by Putin, Surkov and an anonymous but sinister army of Russian oligarchs, has just inflicted a terrible and final blow to the Novorussian dream.

What is going on here?  Has everybody just gone crazy?

In part, this is due that one could read anything, everything and its opposite into this agreement (more about that later) and also to the fact that the western media simply had to present any agreement as a triumph of western willpower, diplomacy and sanctions.  This is all utter nonsense, of course, but that is what you get for exposing yourself to the corporate media.  So let's set aside all the loud clamoring and use our brains to actually *think*.

First, I would remind everybody that the junta as broken every single agreement it committed to.  Every single one.  And there is absolutely no reasons at all to believe that this time around this will change.

This very interesting must read commentary appeared on the website on Friday---and my thanks go out to reader B.V. for bringing it to my attention, and now to yours.


Ukraine ultranationalist leader rejects Minsk peace deal, vows 'to continue war'

Ukraine’s Right Sector leader Dmitry Yarosh said his radical movement rejects the Minsk peace deal and that their paramilitary units in eastern Ukraine will continue “active fighting" according to their "own plans."

The notorious ultranationalist leader published a statement on his Facebook page Friday, saying that his radical Right Sector movement doesn’t recognize the peace deal, signed by the so-called 'contact group' on Thursday and agreed upon by Ukraine, France, Germany and Russia after epic 16-hour talks.

Yarosh claimed that any agreement with the eastern militia, whom he calls “terrorists,” has no legal force.

This very interesting, but longish commentary put in an appearance on the Russia Today website at 3:45 p.m. Moscow time on their Friday afternoon---and I thank Roy Stephens for sharing it with us.


Putin’s trust rating hits 85% historical high

The latest poll has shown that 85 percent of Russian citizens trust President Vladimir Putin and 74 percent say they would vote for him if presidential elections were held next weekend.

The poll, conducted by the Public Opinion Foundation on February 7-8 and released on February 13, shows that the current 85 percent trust rating is up from 75 percent in February 2014. The share of those who said they were ready to vote for Putin was also up from 45 percent one year ago.

84 percent of those polled said they approved of Putin’s work as president and only 7 percent admitted they were discontented with it.

This news item was posted on the Russia Today website at 2:55 p.m. Moscow time yesterday afternoon, which was 6:55 a.m. EST.  It's also courtesy of Roy Stephens.


Gazprom readies Chinese gas pipeline

Russian energy company Gazprom is conducting the route preparations needed to send gas through the Power of Siberia pipeline to China, its top executive said.

Gazprom officials meet in the Siberian city of Tomsk to discuss efforts to build a pipeline to China. The company said the pipeline's route is clear, line preparation is under way and surveys have been conducted for underwater sections.

Gazprom estimates the project will require more than 120 thousand tons of large-diameter pipe. Gazprom Chairman Alexei Miller said project preparations are in full swing.

This short, but very interesting UPI story, filed from Tomsk in Russia, showed up on their Internet site yesterday at 6:02 a.m. EST---and it's the final offering of the day from Roy Stephens---and I thank him on your behalf.


China nears launch of hack-proof ‘quantum communications’ link

This may be a quantum-leap year for an initiative that accelerates data transfers close to the speed of light with no hacking threats through so-called “quantum communications” technology.

Within months, China plans to open the world’s longest quantum-communications network, a 2,000-kilometer (1,240-mile) electronic highway linking government offices in the cities of Beijing and Shanghai.

Meanwhile, the country’s aerospace scientists are preparing a communications satellite for a 2016 launch that would be a first step toward building a quantum communications network in the sky. It’s hoped this and other satellites can be used to overcome technical hurdles, such as distance restrictions, facing land-based systems.

Physicists around the world have spent years working on quantum-communications technology. But if all goes as planned, China would be the first country to put a quantum-communications satellite in orbit, said Wang Jianyu, deputy director of the China Academy of Science’s (CAS) Shanghai branch.

This very interesting 2-page article from the Daixin Online website was picked up by the Internet site at 11:13 a.m. EST on Monday---and I thank reader U.D. for passing it around on Tuesday.  This is another story that awaited a spot in today's column.


Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his thoughts on recent U.S. gold export numbers, continuing economic non-recovery, and this week’s movements in the price of precious metals.

This 6:41 minute audio interview with Eric appeared on the Internet site yesterday---and it's worth your time, if you have any left that is.


Eric Sprott: Expect Physical Gold Backing of Currencies Within Next Decade

Regarding currencies, Eric noted that “I’m kind of shocked that the most volatile sector of the financial market right now is the currencies… it really should be bonds or stocks, but it now seems to be currencies.”

Higher risks within global currency markets buttress, “An awesome outlook for gold,” Eric added. “Last year, 84% of the world’s population would have made money owning gold because of various currency moves—even though gold in US dollars was down approximately 1%.”

Commenting on the root cause of growing currency gyrations, Eric noted that, “The whole precept that printing money is good…that somehow zero interest rates and negative interest rates are good, is totally fallacious…It’s so unimaginable and yet somehow the investment public has bought into it…Things are unstable here…So I imagine probably in less than 10 years we will see physical assets backing currency. Of course, the most likely physical asset is gold.”

This 17:22 minute video interview, along with a transcript, appeared on the Internet site on Tuesday---and I thank Ken Metcalfe for sending it our way.


"It’s business as usual"’ – Gold Fields CEO

HANNA BARRY: Nick, the U.S. Securities and Exchange Commission currently investigating Gold Fields for potential bribery of politicians over the mining licence that was granted to it for South Deep in 2010. Now as part of a Black Economic Empowerment deal a 9% stake in South Deep was given to 73 beneficiaries who have nothing to do with the company, which includes ANC Chairperson, Baleka Mbete and others. That for the sake of our listeners, Nick, was there any bribery in this empowerment deal?

NICK HOLLAND: I’m not at liberty to discuss this particular inquiry, in fact it’s not an investigation, it’s an inquiry. I’m not at liberty to discuss any of the specifics around it, given the fact that there is an SEC inquiry. But all I would say to you is both the board and the management believe strongly in the merits of the transaction and that the spirit and letter of the MPRDA was adhered to, so that’s all we can say at this stage. Obviously it’s a legal process with the inquiry and unfortunately I can’t really say anymore, I’m sorry.

HANNA BARRY: How is this investigation impacting on operating activities? Is it hanging over you or is it really just business as usual?

NICK HOLLAND: It’s business as usual, it’s not impacting our business at all. We have refinanced a lot of debt with a major syndicate of banks, $700m was refinanced, they were comfortable to rollover on the same terms as we had before, 15 international banks. I don’t see any issue, people are buying our shares without any concerns at this stage. So it’s there, we don’t control the process obviously, we don’t control the timing or the outcome but it’s not an investigation per se, it’s an informal inquiry at this stage. So I can’t tell you the time frame for this thing to either move into something else or to be concluded at this point.

HANNA BARRY: And you’re comfortable with the fact that this particular deal was brokered by Gayton McKenzie and Kenny Kunene, of course fairly controversial figures themselves, Gayton a convicted bank robber, that doesn’t bother you?

This very interesting interview appeared on the Internet site at 11:26 GMT on Friday---and it's courtesy of Dan Lazicki.  From what I've read, it doesn't make you want to run out and load the boat with their stock.


SGE Withdrawals 59 tonnes in Week 5, YTD 315 tonnes. What is China Up to With All This Gold?

The day after the World Gold Council (WGC) released Gold Demand Trends Full Year 2014 in which they audaciously pretend Chinese gold demand last year was 814 tonnes, we can read from the Chinese SGE trade report of week 5 withdrawals from the vaults have been 59 tonnes. Year to date (– February 6) withdrawals from the vaults of the central bourse in China stand at 315 tonnes. In perspective, during the first five weeks of 2015 Chinese wholesale demand has been 39 % of what the WGC disclosed as total consumer demand in all of 2014.

More perspective; corrected by the volume traded on the Shanghai International Gold Exchange (SGEI), withdrawals in week 5 were at least 42 tonnes (read this post for a comprehensive explanation of the relationship between SGEI trading volume and withdrawals). Year to date withdrawals corrected by SGEI volume were at least 289 tonnes.

This short commentary, along with a couple of excellent charts, appeared on the Singapore Internet site yesterday---and it's another contribution from Dan Lazicki.  It's certainly worth reading.


Ronan Manly: How the IMF got its Nagpur vault and gave up on Shanghai

In the second installment of his series about the gold vaults of the International Monetary Fund, gold researcher and GATA consultant Ronan Manly explains how Nagpur, India, got on the list and how Shanghai, China, came off it.

Manly's report is headlined "The IMF's Gold Depositories -- Part 2: Nagpur and Shanghai, the Indian and Chinese Connections" and it was posted on the Internet site yesterday---and certainly falls in the must read category.  I thank Chris Powell for wordsmithing "all of the above"---and Ronan Manly for sending it to me yesterday.



¤ The Funnies

The first photo is of a raven standing in one of the parking lots in the Petrified Forest National Park---and looking for a handout.  They're a little smaller than the Canadian variety---and their feathers are much shinier.  Here in Canada, they're much duller looking.  But dull or shiny, the Arizona variety is a handsome bird when viewed close up.  I would have preferred something other than asphalt as a backdrop, but one has to take what one gets in circumstances such as this.  And, once again, the "click to enlarge" feature works wonders.

The first photo below is a tourist like me taking a photo of the landscape.  Everywhere you looked the vistas were stunning and, like the Grand Canyon, no photograph or group of photographs could ever do the place justice.

These is an end-on photo of a petrified log---and as you can see they're multi-coloured in the extreme.  This photo is right out of the camera untouched.  This particular chunk weighs at least a couple of tonnes, as do the bits and pieces you can see in the background.

And here's a general shot of logs and parts of logs strewn about along the walking trail.  I was talking to the guys at the visitor's centre before we left the park---and they said that a lot of tourists leave disappointed, because they expected the trees to be still standing in their original vertical positions---and that would be quite a feat considering these trees have been dead for about 225 million years---and made of solid rock.

I'll have a few more petrified wood photos in my Tuesday column.

Avrupa and Antofagasta intersect copper-rich VMS in Pyrite Belt, Portugal

•             First Greenfields discovery of massive sulfide mineralization in 20 years in the Iberian Pyrite Belt

•             10.85 meters of massive and semi-massive/stockwork sulfide mineralization grading 1.81% Cu, 2.57% Pb, 4.38% Zn, 0.13% Sn, and 75.27 ppm Ag

•             Including 7.95 meters @ 2.21% Cu, 3.05% Pb, 4.82% Zn, 0.15% Sn, 89.8 ppm Ag

•             Followed by 2.90 meters @ 0.71% Cu, 1.27% Pb, 3.17% Zn, 0.092% Sn, 35.4 ppm Ag

•             Avrupa and Antofagasta sign an amended Joint Venture Agreement

Please visit our website to learn more about the company and current exploration program.


¤ The Wrap

Contrary to continuing commentary, there is no “opt out” clause that would prevent anyone holding a futures contract into the delivery period from receiving actual physical delivery should delivery be desired. The only circumstance where someone holding a long contract standing for delivery could be denied actual delivery would involve a contract default. Since the delivery mechanism is what makes the contract legitimate, any delivery default would likely cause the COMEX silver market to cease to exist, as there would be no substance behind a non-delivery contract. There is no easy “getting out” of a demand for delivery apart from closing the COMEX.

The mechanics of taking delivery can seem daunting for those unfamiliar with the process, but it’s not a case of the COMEX discouraging it. One standard contract covers 5,000 oz (although there is also a 1,000 oz contract) and at current prices that comes to around $85,000. One tonne (32,151 oz) of silver, or a little over six standard contracts would come to $550,000 and while that is not a large amount in typical COMEX dealings, not many would consider that small for an individual. No one forces industrial users of silver or any commodity to buy from the COMEX or directly from the miners. Almost universally, manufactures rely on middlemen suppliers who arrange the logistics and timely delivery of silver in the form needed. - Silver analyst Ted Butler: 11 February 2014

Today's pop "blast from the past" is from an American icon that needs no introduction, as she has a "one in a million voice"---and this was one of here biggest hits.  The person who introduces her doesn't need much of an introduction either.  The link is here.

Today's classical blast from the past is Robert Schumann's Piano Concerto in A minor, Op. 54.  It's a musical tour de force in the hands of the proper pianist---and Murray Perahia is certainly up to the task as the Royal Concertgebouw Orchestra accompanies.  The video quality isn't the best, but that's not what's important---and the link is here.

I must admit that yesterday's price action was somewhat of a surprise, particularly in silver.  I was certainly happy to see it, but keenly aware that, just like to the downside, these rallies were all just paper trading between the technical funds one one side---and the price controlling Commercial traders on the other.

When I see trading days like this, all I think of now is the Commercial short position going up which will, sooner or later, have to be alleviated with an engineered price decline for "da boyz" to buy back at a profit the short side of a contract they purchased from Managed Money technical funds as they went long.  That's what happened on Friday, particularly in silver.

Here are the 6-month charts for both gold and silver updated with Friday's data.

You just have to wonder about the forces going on behind the scenes that appear to be driving the world into economic, financial, political and monetary ruin.  The voices of reason seem to be gone---and some sort of global train wreck is about to be visited upon us, as all the money, power and evil in the world bring things to a head.

And I'm not the only writer that thinks that.  Doug Noland has been going on about it for years now---and this is what had to say about it in his Credit Bubble Bulletin yesterday evening---

"After six years of unprecedented central bank monetary measures, the end is still nowhere in sight.  The highly abnormal has become the enduring normal.  Indeed, the global monetary backdrop gets crazier by the week – and everyone’s fine with it.  Federal Reserve policy making is now celebrated as an indisputable success – testament to what injecting $3.6 Trillion of new “money” into securities markets can accomplish.  And each week the world seems a bit closer to coming completely unglued."

The banks are now all powerful.  HSBC is the latest financial institution to get "outed"---and I know from past history that the rot at that bank leads everywhere.  But if you look hard enough, all the big banks of the world are corrupt to their very cores.  And not to be forgotten are the explosive comments from Jim Rickards the other day where he called JPMorgan Chase "the most corrupt enterprise in history"---and he said it on the record as well!  The video where he says that is posted in today's column.

And through all of this, the precious metal prices have been held in check---and not even the gold miners in South Africa, who are in a world of hurt right now, are prepared to lift a finger to save themselves, even though they know perfectly well what's going on.

I'd like to say that I could see the future clearly, but I can't.  I have no idea what's coming, except that it will be uglier than probably even I imagined it might be---and I can imagine quite a bit.

As I've said before in this space, I'd like to think that I've done everything possible to protect myself and my family, but the fact of the matter is I just don't know if it's enough, or even the right things.  However I won't know for sure until that day comes---and at that point it will be far too late to change things.

So I wait.

See you on Tuesday.

Ed Steer