Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

The gold price chopped along just above $1,170 the ounce through all of Far East and most of London trading on Friday---and then at 9:00 a.m. EDT it began to rally, topping out around 12:45 p.m.  From there it sold off a bit until around 3 p.m. in electronic trading---and from that point traded flat into the 5:15 p.m. close.

The low and high were reported as $1,167.90 and $1,187.40 in the April contract.

Gold closed in New York yesterday at $1,1182.40 spot, up $11.40 on the day.  Net volume wasn't overly heavy at 129,000 contracts.

Here's the 5-minute tick gold chart courtesy of Brad Robertson once again.  The New York open on Thursday evening starts at 16:00 on this chart, as it's Denver time---and you have to add two hours for EDT.  Volume picks up just before the 8:20 a.m. EST open---and disappears by 3:00 p.m. EDT.  The 'click to enlarge' feature really helps here.

Silver also traded flat until 9:00 a.m. in New York yesterday morning---and its rally was far more substantial, as both the 20 and 50-day moving averages were penetrated to the upside, and it closed at its 50-day moving average.  It's a given that the technical funds in the Managed Money category began to cover some of the rather large short positions that they accumulated during the prior engineered price decline.  I'll have more on this in The Wrap.

The high was in around the COMEX close---and around 2 p.m. EDT, the price began to weaken---and then traded flat from 3:30 p.m. into the close.

The low and high were recorded by the CME Group as $16.08 and $16.89 in the May contract.

Silver finished the Friday session at $16.725 spot, up 61.5 cents from Thursday---and well off its high tick.  Because of all the moving average penetrations yesterday, net volume was way up there at 54,000 contracts.

The platinum and palladium price charts are similar in most respects to gold and silver's charts.  Platinum closed at $1,134 spot, up fourteen dollars---and palladium finished the Friday session at $775 spot, up 13 bucks on the day.  Here are the charts.

The dollar index closed late on Thursday afternoon in New York at 99.07---and didn't do much until it began to head south starting around 12:20 p.m. in London trading.  The 97.55 low tick came shortly before, or at, the 1:30 p.m. EDT COMEX close---and it rallied back to 98.00 by 3:15 p.m., before sliding into the 5:15 p.m. close of electronic trading.  The dollar index finished the Friday session at 97.81---down 126 basis points on the day.

For the the world's premier reserve currency, it's certainly been a wild ride lately.

Here's the 6-month U.S. Dollar Index chart, so you can see this "wild ride" for yourself.

The gold stocks gapped up a bit at the open---and then quietly worked their way higher until a few minutes before the COMEX close.  Then they sold off equally as quietly---and the HUI finished the Friday session up 2.74 percent.

The silver equities opened unchanged, but ran higher immediately, hitting their highs just before 1 p.m. in New York---and before the high tick was in for silver.  From there they chopped quietly lower into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 3.24 percent.

Nick was kind enough to let me know that the HUI was up 4.54 percent for the week---and his Intraday Silver Sentiment Index closed up a robust 6.75 percent.

The CME Daily Delivery Report showed that zero gold and 39 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.   Once again it was Jefferies as the only short/issuer---and JPMorgan stopped 28 of those contracts in its in-house [proprietary] trading account. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest declined by 3 contracts to 108 contracts still left open in March---and silver's open interest in March is now down to 541 contracts, a drop of 30 contracts since Thursday---minus the 39 mentioned in the above paragraph.

An authorized participant took a large amount of gold out of GLD yesterday.  This time it was 172,750 troy ounces.  And as of 7:22 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I was putting the finishing touches on today's column at 4:39 a.m. EDT, I noted that the iShares.com website had been updated---and it showed that 573,949 troy ounces were withdrawn.  That's a little large for a fee payment, so it's a good bet, based on recent price action, that the silver was probably needed elsewhere.  I'll be interested in Ted's take on this.

There was a tiny sales report from the U.S. Mint on Friday.  They sold 2,000 troy ounces of gold eagles---and that was all.

Month-to-date the mint has sold 34,500 troy ounces of gold eagles---8,000 one-ounce 24K gold buffaloes---and 2,068,000 silver eagles.  Based on these sales, the silver/gold ratio works out to just over 48 to 1.

There was a very decent amount of gold and silver moved around at the COMEX-approved depositories on Thursday.  In gold, nothing was reported received, but 67,368 troy ounces were shipped out---all of it from Scotiabank's vault.

In the two new "Gold Kilo Stocks" COMEX depositories, there was 464,839 troy ounces reported shipped into Brink's, Inc.---and 445,291 troy ounces shipped out of the same vault.  Neither of the amounts involved looked like they were in kilobar form

In silver, only 9,173 troy ounces were reported received, but a pretty chunky 1,550,429 troy ounces were shipped out the door.  The entire amount came out of the vaults of HSBC USA.

The Commitment of Traders Report, for positions held at the close of trading on Tuesday, was everything that Ted was hoping for---and in gold, it was wildly better.

But first with silver.  In this precious metal, the Commercial net short position declined by 3,053 contracts, or 15.3 million troy ounces.  The new Commercial net short position---and probably low for this cycle---stands at 151.0 million troy ounces.   We'll never get near the 70-ish million troy ounce low of last November again---and I know that Ted will have more to say about it in his column to paying subscribers later today.

The Big 4 traders reduced their net short position by about 1,000 contracts---the '5 through 8' big traders actually added around 2,200 contracts to their short position---and the balance of the Commercial traders, Ted Butler's raptors, added another 4,300 contracts to their already large long position.  Ted pegs JPMorgan's short position at the lower end of the range that he gave a week ago---and that was 13,000 contracts.  Don't forget the JPMorgan is no longer the big silver short on the COMEX.  That title now belongs to Canada's Scotiabank.

Under the hood in the Disaggregated COT Report, the technical funds in the Managed Money category added a very chunky 5,035 contracts to their already large short position---and the 'unblinking' non-technical fund longs in the Managed Money category added another 1,002 long contracts.  Like I said last week---"'Who are these guys?"

In gold, the Commercial net short position declined an eye-watering 32,852 contracts, or 3.29 million troy ounces.  The Commercial net short position is now back to almost where it was in early November---and that is 5.65 million troy ounces.

The Big 4 traders in gold actually added about 800 contracts to their current short position---and the '5 through 8' traders covered about 10,000 contracts of their short position---and Ted's raptors added around 21,700 contracts to their current long position.

Under the hood in the Managed Money category of the COT Report, the technical funds not only sold 9,185 long contracts that they were still holding, but they also added a huge 20,264 contracts to their already-impressive short position.  I was amazed by these numbers.

I would bet money that this report represented the bottom of the price barrel from a COT perspective in all four precious metals---and without doubt there's been a fair amount of deterioration in the Commercial net short position since the cut-off, especially after yesterday's price action.  Ted is hoping that its the raptors doing a lot of long selling for profit---and that JPMorgan is buying as many of those contracts as they can.  We'll know next Friday.

Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" chart updated with Tuesday's COT data---and you can see the collective short positions of the Big 4 and '5 through 8' traders in all physically traded commodities on the COMEX.  Even though the combined short positions of the 'Big 8' traders are still outrageous and manipulative to the price, these are the lowest they've been for over four months, so take a picture!

Since yesterday was the 20th of the month---and it fell on a week day---the folks over at The Central Bank of the Russian Federation updated their website with February's data.  It showed that for the second month in a row they didn't add any gold to their reserves---and it's  a safe bet that if they did sell their February gold production, it all ended up in China.  Here's Nick's chart.

It was all over the Internet yesterday, as the Shanghai Gold Exchange withdrew 51.456 tonnes for the week ending March 13---and once again I thank Nick Laird for providing the chart below.  I have a couple of stories about this in the Critical Reads section below.

I have a huge number of stories for you today---and I hope you have enough time left in your weekend to read the ones that interest you.  I also have a quite a few lengthy and/or off-topic stories that I've been saving for today as well.

 

¤ Critical Reads

Oil, S&P Futures Soar as Quad Witch Volatility Arrives

Just as we warned not even two hours ago, things on quad-witching get exciting, and volatile.

And sure enough, after starting out the overnight session calmly and without much fanfare, U.S. equity futures have proceeded to surge on absolutely no news, but merely what appears to be the latest market-wide stop hunt, or as the CME's central bank liquidity rebate program is being put to good use.

This short Zero Hedge piece, with three excellent charts, appeared on their Internet site at 8:57 a.m. EDT on Friday morning---and today's first story is courtesy of Dan Lazicki.

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Jim Grant on CNBC: Odds against the Fed getting it right

Jim Grant sounds the alarm on Fed monetary policy.  The Fed can change the way things look, but not what things are.

This 4:00 minute video clip from CBNC's "Squawk Box" is definitely worth your while, even though he said all this before the Fed spoke on Wednesday afternoon.  It was posted on the grantspub.com Internet site last night---and I thank reader U.D. for sending it our way.

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"Market Is Hyper Overpriced" Warns Retiring Fed President; "Significant Correction" Coming

Fresh from a well-publicized dollar dispute with Goldman’s Gary Cohn, recently retired Dallas Fed chief Richard Fisher made an appearance on CNBC Friday and spoke with Rick Santelli. There were quite a number of notable exchanges including the following zingers.

Santelli: “Do you think any part of the stock market being high has anything to do with the committee you just left and if you didn’t grade the economy on a curve would you still give it a 10?”

Fisher: “Well, what worries me is how totally lazy investors have gotten, totally dependent on the Federal Reserve and I find this to be a precarious situation.”

Fisher: “Are we vulnerable in my personal opinion to a significant equity market correction? I believe we are.”

This 7:11 minute video clip showed up on the Zero Hedge website at 1:36 p.m. EDT yesterday---and it's the second offering of the day from Dan Lazicki.

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When The World's Reserve Currency Flash Crashed: "I Haven’t Seen Anything Like It Since The Financial Crisis’

On Wednesday afternoon, just after the close of the market, the US Dollar, the world's reserve currency flash crashed. This is how The Wall Street Journal described the move:

In the latest episode Wednesday, a message from the U.S. Federal Reserve that it is in no hurry to raise interest rates caused a big slump in the dollar, which has run up a huge rally so far this year. The euro surged more than 4% against the buck, its biggest jump in a single day in 15 years, according to Deutsche Bank. Early on Thursday, the European currency resumed its slide.

The sheer speed of the round trip in the euro-dollar exchange rate—the world’s most heavily traded currency pair—left traders and investors reeling.

Well dear reader, I called it a near-death experience in Thursday's column---and that was before the WSJ wrote about it---and that has certainly turned out to be the case.  This must read Zero Hedge piece appeared on their Internet site at 2:23 p.m. EDT yesterday---and it's also courtesy of Dan Lazicki.

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Michael Lewis Reflects on His Book Flash Boys, a Year After It Shook Wall Street to Its Core

When I sat down to write Flash Boys, in 2013, I didn’t intend to see just how angry I could make the richest people on Wall Street. I was far more interested in the characters and the situation in which they found themselves. Led by an obscure 35-year-old trader at the Royal Bank of Canada named Brad Katsuyama, they were all well-regarded professionals in the U.S. stock market. The situation was that they no longer understood that market. And their ignorance was forgivable. It would have been difficult to find anyone, circa 2009, able to give you an honest account of the inner workings of the American stock market—by then fully automated, spectacularly fragmented, and complicated beyond belief by possibly well-intentioned regulators and less well-intentioned insiders. That the American stock market had become a mystery struck me as interesting. How does that happen? And who benefits?

By the time I met my characters they’d already spent several years trying to answer those questions. In the end they figured out that the complexity, though it may have arisen innocently enough, served the interest of financial intermediaries rather than the investors and corporations the market is meant to serve. It had enabled a massive amount of predatory trading and had institutionalized a systemic and totally unnecessary unfairness in the market and, in the bargain, rendered it less stable and more prone to flash crashes and outages and other unhappy events. Having understood the problems, Katsuyama and his colleagues had set out not to exploit them but to repair them. That, too, I thought was interesting: some people on Wall Street wanted to fix something, even if it meant less money for Wall Street, and for them personally.

This very excellent essay appeared on the vanityfair.com Internet site earlier this week---and it's one of the stories I've been saving for Saturday's column.  It's a must read---and I thank UAE reader David Thorpe for sending it our way.

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Jim Rickards: Contagion Déjà Vu

As my flight from New York to Hong Kong touched down on Sept. 17, 1997, and taxied to the gate, I was startled by the plane parked at the next gate.

It was an old Boeing 707 with the words “United States of America” on top of the fuselage in a configuration eerily reminiscent of the original Air Force One that carried President Kennedy’s body to Washington from Dallas after his assassination in 1963.

But this plane did not have the familiar light blue trim of the presidential fleet. Instead, it had a dark green trim in a shade I refer to as “Treasury green.” This was the government plane transporting U.S. Treasury Secretary Bob Rubin and other officials to the annual meeting of the IMF.

I was there for the same meeting, representing Long Term Capital Management, the then mysterious hedge fund that dominated trading in government bonds of countries around the world. With me were several LTCM partners, including David W. Mullins Jr., a former assistant secretary of the Treasury in charge of federal finance and vice chairman of the Federal Reserve.

This interesting commentary by Jim appeared on thedailycoin.org website yesterday---and it was originally posted on the dailyreckoning.com Internet site on Thursday.  I thank Harold Jacobsen for digging it up for us.

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Recent Economic Data Shows the Good Side of Deflation

The Fed, the ECB, and the Bank of England repeatedly tell us that deflation is extremely dangerous for an economy. Central bankers, most economists, and the media speak of deflation as one of the greatest disasters that can strike an economy.

It is stunning then, given the apparent importance of the subject — and the possible collateral damage of pro-inflation policies — that few seem to bother to ask the deeper, fundamental question: does the historical data show that deflation is actually a terrible thing? The data suggests that it is not. In fact, looking at recent GDP, inflation, and employment data, one could even say that a shot of deflation is what many economies need. Let us take a look at the recent real-life examples.

This short essay originally appeared on the Mises Institute website, but got picked up by the folks over at Zero Hedge Friday morning---and it's certainly worth reading if you have the interest.  I thank Dan Lazicki once again for sending it along.

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The Latest Flashing Red Light: Global Earnings Plunge Most Since Lehman

We will leave it to the chartists to provide an appropriate name for the formation shown below (mutation unchallenged head and shoulders?) but one that is obvious is that global stocks as measured by the MSCI world index have never been higher, and the global central bank bubble has now easily surpassed both the dot com bubble and the first housing/credit bubble.

But why the surge? We will leave that one to the economists, but we will observe that as BofA comments, "global equity 12-month forward EPS has turned negative on a YoY basis (-6.7%)."

In fact, as the chart below shows, global forward EPS is now plunging at the fastest rate since Lehman, and is down to levels last seen in 2011.

Here's another Zero Hedge piece.  This one was posted on their website at 10:51 a.m. EDT on Friday morning---and it's also courtesy of Dan Lazicki.

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PAUL TUDOR JONES: Income inequality will end in revolution, taxes, or war

Legendary hedge fund manager Paul Tudor Jones II gave a dire warning about the growing gap between the rich and the poor in the U.S. during a sold out TED Talk in Canada this week. 

"Now here's a macro forecast that's easy to make and that's that the gap between the wealthiest and the poorest it will get closed. History always does it. It typically happens in one of three ways– either through revolution, higher taxes or wars. None of those are on my bucket list," PTJ said, according to a video of the event viewed by Business Insider. 

During his talk, Tudor Jones, who has an estimated net worth of $4.6 billion, praised capitalism.

There's no link to the Ted video, as this businessinsider.com story is basically an executive summary.  It showed up on their website at 6:38 p.m. EDT on Thursday evening---and I thank Roy Stephens for his first contribution of the day.

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Doug Noland: True Ultra-Dovishness

I have argued for a number of years now that it was imperative for the Fed to begin extricating itself from market intervention and manipulation. It was never going to go smoothly, but when it comes to dealing with market distortions and Bubbles the earlier the better. The scope of the Bubble has now grown to unprecedented dimensions – throughout virtually all securities and asset markets – and its global: stocks – small caps, mid-caps, large-caps – risky and “defensive” – growth and income; bonds – sovereign, corporate, “developed” and “developing”; and all varieties of derivatives. Anything providing a yield.

The fundamental issue is a desperate need for the Fed to commence a process of normalizing the pricing of market risk. Savings needs to generate a positive real return. The enormous ongoing flow of (unsuspecting) savings into grossly inflated risk markets only exacerbates systemic risk. The Bubbling corporate debt market needs to be tested – and some market discipline reinstated. The ETF and “bond” fund complexes, recipients of Trillions of flows, need to be tested – and market discipline allowed to run its course. The self-reinforcing stock buybacks, M&A and other “financial engineering” need to be tested by a period of tighter finance and associated risk aversion. Will they stand up?

I am convinced the underlying finance driving the markets and, increasingly, the economic boom is unstable. I believe the best kept secret is that enormous amounts of global “hot money” are flooding into king dollar asset markets – U.S. stocks, bonds, real estate and business investment. It is an unsound dynamic and it’s unsustainable.

Doug's weekly Credit Bubble Bulletin is always a must read for me---and I'll get around to it either today or tomorrow.  It was posted on his website early Friday evening---and I thank reader U.D. for sending it our way before I could find it on my own.

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California is Turning Back Into a Desert and There Are No Contingency Plans

Once upon a time, much of the state of California was a barren desert.  And now, thanks to the worst drought in modern American history, much of the state is turning back into one.  Scientists tell us that the 20th century was the wettest century that the state of California had seen in 1000 years.  But now weather patterns are reverting back to historical norms, and California is rapidly running out of water.  It is being reported that the state only has approximately a one year supply of water left in the reservoirs, and when the water is all gone there are no contingency plans.  Back in early 2014, California Governor Jerry Brown declared a drought emergency for the entire state, but since that time water usage has only dropped by 9 percent.  That is not nearly enough.  The state of California has been losing more than 12 million acre-feet of total water a year since 2011, and we are quickly heading toward an extremely painful water crisis unlike anything that any of us have ever seen before.

But don’t take my word for it.  According to the Los Angeles Times, Jay Famiglietti “is the senior water scientist at the NASA Jet Propulsion Laboratory/Caltech and a professor of Earth system science at UC Irvine”.  What he has to say about the horrific drought in California is extremely sobering…

As our “wet” season draws to a close, it is clear that the paltry rain and snowfall have done almost nothing to alleviate epic drought conditions. January was the driest in California since record-keeping began in 1895. Groundwater and snow pack levels are at all-time lows. We’re not just up a creek without a paddle in California, we’re losing the creek too.

Data from NASA satellites show that the total amount of water stored in the Sacramento and San Joaquin river basins — that is, all of the snow, river and reservoir water, water in soils and groundwater combined — was 34 million acre-feet below normal in 2014. That loss is nearly 1.5 times the capacity of Lake Mead, America’s largest reservoir.

I've posted stories about this several times over the last ten years, but all the chickens are now coming home to roost.  This essay showed up on the Zero Hedge website on Monday---and it's a must read.  The embedded 13-minute CBS 60-Minutes video clip is a must watch as well.  For obvious reasons this story had to wait for today's column---and I thank reader M.A. for bringing it to our attention.

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A Police Gadget Tracks Phones? Shhh! It’s Secret

A powerful new surveillance tool being adopted by police departments across the country comes with an unusual requirement: To buy it, law enforcement officials must sign a nondisclosure agreement preventing them from saying almost anything about the technology.

Any disclosure about the technology, which tracks cellphones and is often called StingRay, could allow criminals and terrorists to circumvent it, the F.B.I. has said in an affidavit. But the tool is adopted in such secrecy that communities are not always sure what they are buying or whether the technology could raise serious privacy concerns.

The confidentiality has elevated the stakes in a longstanding debate about the public disclosure of government practices versus law enforcement’s desire to keep its methods confidential. While companies routinely require nondisclosure agreements for technical products, legal experts say these agreements raise questions and are unusual given the privacy and even constitutional issues at stake.

This article showed up on The New York Times website last Sunday---and is another item that had to wait for today's column.  I thank West Virginia reader Elliot Simon for sharing it with us.

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Hillary: The New York Times Will Never Tell Us This

If she wasn’t such an ice-cold-hearted person, one might almost feel sorry for Hillary Rodham Clinton. Now, before she even officially declares her candidacy for the Democratic Party nomination in 2016 to become successor to Barack Obama as President, she lands in the middle of another very ugly scandal. This new scandal might well spell the end of her presidential obsession, and that of her obsessive husband Bill Clinton to get back into the power loop.

The new scandal involves Haiti, that tormented island in the Caribbean which gets hit not only by earthquakes but also by the ravages and looting acts of the Clintons and their friends and relatives. It involves obvious misuse of Bill Clinton’s position in Haiti since the January 2010 earthquake that killed more than 300,000 Haitians. It involves nepotism with the brother of Hillary Clinton. It involves Hillary directly, and it involves a foundation owned by the Clinton family which works closely with a reputed Mexican narco kingpin and some of the dirtiest Clinton political associates from their days in Washington.

The timing of events here is important. On March 5, the popular web blog Breitbart published a story taken from an about-to-be-released new book by award-winning journalist, Peter Schweitzer titled, Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich. The book details facts around an unprecedented award for a gold mine, the first such granted in Haiti by the government in 50 years, to an obscure North Carolina company named VCS Mining to mine the Morne Bossa.

VCS Mining according to Schweitzer, had on its board of directors Tony Rodham. Never heard of him? Hillary Clinton’s family name is Hillary Rodham and Tony is her brother. Not only that, but the mining company also lists another board member, former Haitian Prime Minister Jean-Max Bellerive. Bellerive co-chaired the “charitable” Interim Haiti Recovery Commission with former US President and Hillary’s husband (at least legally), William Jefferson Clinton.

I posted the story about this gold mine purchase when it first came out in early March---and I wondered out loud at the time, as to what this might be about.  Well, I don't need to doubt any longer.  This William F. Engdahl essay appeared on the journal.neo.org Internet site yesterday---and it tells all and names names.  In my opinion it's definitely worth reading, but that decision is entirely up to you.  It's the second offering of the day from Roy Stephens.

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U.N. Orders Review of 1961 Crash That Killed Dag Hammarskjold

The plane had flown deep into the African night on a mission for peace. Finally, it drew near its destination in the copper mining region of what is now northern Zambia. The crew radioed for permission to descend. Then there was nothing.

On the night of Sept. 17 to 18, 1961, the plane, a Transair Sweden DC-6B named Albertina, was carrying Dag Hammarskjold, the secretary general of the United Nations, and 15 other people. Mr. Hammarskjold was on his way to meet with Moise Tshombe, the leader of a bloody secession movement in Katanga, a province of the neighboring Democratic Republic of Congo with vast deposits of strategic minerals, including uranium and cobalt.

But the four-engined plane crashed minutes after the last radio contact, in a stretch of bushland eight miles from the airport at Ndola, in what was then the British protectorate of Northern Rhodesia.

The crash turned a hinge in the tortured narrative of modern Africa, poised between rule by outside powers and independence. But its cause has never been established.

This event occurred in the days before we had TV in our area of Canada.  It was on the radio---and also on the weekly newsreels at the small movie theatre in our town.  Not surprisingly, it was the American government behind it.  This must read article appeared on The New York Times website on Monday---and had to wait for Saturday's column.  I thank Roy Stephens for finding it for us.

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The Decline of Vancouver

Vancouver, once a city with its own unique spin on Canadian ideals and culture, is well on its way to becoming a vacation city for the world’s rich, its economy transforming into one predicated almost entirely on catering to their luxurious proclivities, and its citizens transformed into modern serfs permitted to live in smaller dwellings on the city’s periphery, if you’ll allow me to exaggerate for effect.

Hyperbole aside, consider this: the nature of serfdom was one where serfs, unable to acquire their own plot of productive land, worked and lived on the land of wealthy nobles whom they served. In Vancouver the average person who owns a detached home made more money from capital gains on their property, roughly $100,000 per year in the last decade or so, than the average Vancouverite made in income, roughly $65,000. At those rates, it’s effectively impossible for average people without seed capital to join in on the boons of the Vancouver property boom, and so their role in the city’s largest source of wealth generation, property ownership, becomes catering to those who can take part, selling to them luxury booze, food, cars, clothes, and even their bodies. We have two classes of society forming along a divide that is growingly difficult to cross.

Real estate appreciation is not unique to Vancouver. Calgary and San Francisco, for instance, have seen gains in the real estate market near Vancouver rates, but those gains were a result of booming economies and income growth in those areas from oil and tech respectively. Vancouver has experienced no commensurate economic or income boom. According to Teranet’s housing price index, over the past 5 years Vancouver’s property prices have grown by about 23% compared to about 16% in Calgary – this despite Calgary’s economic growth running near double that of Vancouver’s over the same period. With the decline of oil prices, Calgary’s real estate market has tanked, as it would in a rational market. It’s safe to say economic prosperity has little to do with our real estate market. Anyone arguing that Vancouver growth outpaced Calgary’s because it’s a nicer place to live should note that Vancouver has been a nicer place to live than Calgary for a few decades now – suffice it to say any difference between the cities’ populations as a result of such known factors would already have been accounted for in the base population---and foreign ownership is, of course, the culprit.

This very interesting essay put in an appearance on the tumblr.com website last Saturday---and for obvious reasons had to wait for today's column.  Once again I thank Roy Stephens for sharing it with us.

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FTSE 100 breaks above 7,000 for first time

The FTSE 100 has broken through the 7,000 level for the first time in its history, propelled by investor hopes that interest rates will stay at record lows and signs that Greece will stave off a deeper financial crisis.

Britain’s benchmark index of shares climbed 60.19 points to finish the day at 7,022.51, a 0.9pc gain that took the index to its highest ever close. A new intraday record was also set, with the index touching 7,024.21 during the afternoon.

It was a landmark moment for the index, as the 7,000 level is seen as psychologically important. The FTSE 100, which was launched in 1984, first breached the 6,000 mark in 1998 and it has taken another 17 years to surpass the next milestone.

This news story appeared on The Telegraph's website at 3:12 p.m. GMT on their Friday afternoon, which was 11:12 a.m. in New York---and as Roy Stephens said in the accompanying e-mail---"Print enough money and anything is possible…".  Amen to that, bro'!

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As "Spectacular" Solar Eclipse Covers Europe, Fears Turn to Its Power Grid

Some parts of Europe witnessed a near total solar eclipse this morning, an event which, while fun to observe (not without the proper equipment please), presents a challenge for solar panels: namely, a lack of sun. As it turns out this same problem happens at night but, as The Wall Street Journal reports, the rapidity with which an eclipse darkens the earth could cause blackouts if the energy grid can’t take up the slack quick enough. Here’s more:

The solar eclipse will provide an acid test for a continent that has placed a big bet on renewable energy—but whose aging electricity grids could buckle under the strain of a sudden drop in solar power.

“Given the growth of renewables across Europe in recent years, this will require an unprecedented amount of careful balancing of supply and demand across the grid,” said Valentin de Miguel of consulting firm Accenture...

The partial disappearance of the sun Friday will place a huge strain on Europe’s energy system. Normally, when the sun goes down, it takes about an hour for the light to fade. That gives time for electricity grids to substitute the power flowing from solar panels with electricity generated from traditional sources such as coal and natural gas.  Not so with a total solar eclipse.

I flew to the "Big Island" Hawai'i back in 1991 to see my first solar eclipse.  It was one of the most amazing experiences of my life---and the world's Umbra Addicts were there in all their glory.  I will be at the solar eclipse in the U.S. on August 21, 2017---as a thousand horses couldn't drag me away from it.  An eclipse is, and will always be, a temporary but unavoidable problem for any solar array---and the bigger it is and the more people that depend on it, the worse it will be, because at totality there is no sun at all---just the glorious corona, along with any solar flares that happen to be on the sun's perimeter.  For us space/science enthusiasts, this is a must read.

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Ukraine sends request for proposals for U.S.-guaranteed bond

The Republic of Ukraine has sent out a request for proposals (RFP) to banks for a new U.S. government-guaranteed bond, according to three sources.

This is the second time the U.S. government has thrown its financial backing behind a Ukrainian international bond issue.

In May 2014, the U.S. guaranteed a US$1bn Ukrainian bond maturing in 2019 through the U.S. Agency for International Development.

That bond was given a credit rating in line with the U.S. sovereign at Aaa by Moody's, AA+ by Standard & Poor's and AAA by Fitch, which is a far cry from Ukraine's credit rating, which stands at Caa3, CCC and CC with the same three agencies.

David Stockman's headline to this Reuters story reads "This Is Outrageous—–Washington To Guarantee More Ukrainian Debt So Kiev Can Fund Its Bloody Civil War"--and he may not be far from the truth on that one.  It appeared on their website at 5:18 a.m. EDT on Friday morning---and my thanks go out to Roy Stephens once again.

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‘Ukraine new spy law designed as provocation, opens whole can of worms’

If Ukrainian draft law on intelligence comes into force, we might start seeing assassinations, bomb blasts, and psychological attacks in the Donbass region, says Daniel McAdams of the Ron Paul Institute.

Ukraine's parliament has passed a law allowing its intelligence units to carry out military operations in eastern Ukraine. If the President Petro Poroshenko signs the law, it would allow special services to infiltrate and operate in the self-proclaimed Donetsk and Lugansk republics.

RT: How does this current move from Kiev correlate with the current peace process in east Ukraine?

Daniel McAdams: I think it’s a provocation and it is designed to be a provocation. The goal is stated clearly from Kiev and it’s echoed in Washington, and to a degree in Berlin, as well, which is that Ukraine needs to be whole again - that is the point they are making including eastern Ukraine and even Crimea. So it is meant to be a provocation.

This very interesting news item was posted on the Russia Today website at 12:57 p.m. Moscow time on their Friday afternoon, which was 5:57 a.m. EDT in Washington.  I thank Roy Stephens for finding it for us.

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Ukraine SITREP Friday March 20th, 2015

Just like the Titanic, the Ukraine is sinking faster and faster.  By now, I expect that most of you must have heard of the quasi-insurrection in occupied Konstantinovka following the killing of a mother and child by a drunken Ukrainian APC crew.  Accident can happen anywhere, of course, but the quasi-insurrection which took place following this accident is indicative of the rage and hostility of the local population towards their Nazi occupiers.  The reaction of Kiev, however, was “picture perfect”: they blamed the accident on Russian provocateurs and flooded Konstantinovka with death squads.

Then there is the mini-war taking place between the “President” Poroshenko and the notorious Jewish oligarch Kolomoiskii over the control of Ukrtransnafta.  This is a clear sign of the deep process of “Somalization” taking place in which all the power in the country is divided between warlords.  Kolomoiskii is probably a far more powerful figure than Poroshenko and he controls the “neo-Khazarian Ukraine” (southern Urkraine, Black Sea cost, Odessa region) and there are many who believe that he is the man who paid for the downing of MH17 (Kolomoiski admitted to this on a private video call by Skype).  Still, he is ready to run should it be needed, and has therefore secured three citizenships: Ukrainian, Cypriot and Israeli.

As for the Ukrainian economy, it continues to behave like a 911 building and continues to tumble down at a free-fall acceleration.

This very interesting---and rather brief commentary appeared on thesaker.is website on Friday---and once again I thank Roy Stephens for sending it.  It's worth your while if you have the interest.

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Putin's war decimates Ukraine as economy shrinks 15 percent -- The Telegraph

Ukraine's economy shrank at an alarming 14.8pc over the last three months of the year, as conflict with neighbouring giant Russia and simmering civil war have devastated the country.

The economy contracted by 6.8pc in 2014, according to the country's statistical authority, but the slump could worsen to as much as 12pc in 2015 according to government forecasts.

A collapsing currency, dwindling central bank reserves and eye-watering inflation near 30pc have led to Kiev requesting a $17.5bn bail-out from the International Monetary Fund.

The government is also looking to restructure its sovereign debt pile as part of the programme.

This news story showed up on the telegraph.co.uk Internet site at 11:30 a.m. GMT yesterday morning local time.

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Batchelor and Cohen: Ukraine still a hot spot and getting worse

With apparently (now) three battalions of troops soon to have feet on the ground in Ukraine, war drums still pounding from politicians in Kiev and Washington and NATO spokespeople, and Minsk2 still holding, more or less, one could conclude that peace has only a chance of success. We are also informed about 1,500 or more boots connected with U.S. intelligence and other U.S. agencies in Kiev. This is clearly not about supporting Minsk2 and is all independent of growing opposition in Europe for more war in Ukraine.

War materiel is also quietly flowing into Kiev territory from the U.S. (drones and artillery tracking radar), and statements by Poroshenko and his parliament are giving strong indications that a continuation of the civil war is being strongly contemplated. Poroshenko now has funds from the IMF with which to continue his war aims. Obama, so far, is holding in support for Minsk2, but he is surrounded by opposition to the truce holding and is being out shouted by his war party.  This is a still dangerous situation and may be getting worse. Events seen boiling in the background would indicate Poroshenko is still working on a war resolution with the East.

In the meantime E.U. opposition is growing against Washington's support for more war and it is very possible that American insistence on sanctions continuing, if not increasing in scope, may bring another crisis to the E.U. Europe may not support sanctions come June when they are up for consideration by the E.U. for renewal. If it comes down to a rejection for sanctions  (which would not be dropped by Washington), this would represent a very real rift between Europe and Washington and certainly open the larger question of the continuation of the existence of NATO. Cohen states that the E.U. could very well go its own way - and perhaps with its own army. 

This 39:47 minute audio interview with Steven F. Cohen appeared on the johnbatchelorshow.com Internet site last Sunday---and for both length and content reasons had to wait for today's column.  I thank Larry Galearis for digging it up for us.

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How Crimea's Sevastopol Has Changed since Joining Russia

The last year changed many things in my life, so it will be appropriate to summarize certain intermediate results associated with the changes in Sevastopol borne of the Crimean spring. I decided not to group this in blocks, so I simply write what came to my mind during the attempts to recall what has changed over a year.

1. Crimea stopped being a part of Ukraine and became a part of Russia. I wished for this event for many years, so here my dream simply came true. Those people whose dreams come true must understand very well how this feels like.

2. Ukrainian flags and Ukrainian insignia disappeared from the city. Only very rarely one can meet Ukrainian text or old advertisement banners in Ukrainian. The city speaks Russian and after the cancellation of the obligatory use of Ukrainian, which they previously tried to implant by force, the Ukrainian language simply disappeared because it wasn't needed, even though there is no special ban on the use of Ukrainian - if one wants, one can put banners in Ukrainian, the law permits it. If one wants to speak Ukrainian, one is free to do so. All of these rights are present, but nobody uses them because there is no need to do so.

3. One may now go to a movie theater without fearing the obligatory translation of the movies to Ukrainian in a city where 99% speak Russian. For several years I didn't go watch movies for the language reasons; in the last year I was there more often than in the previous 5 years.

This boots-on-the-ground commentary showed up on the russia-insider.com Internet site on Thursday---and it's certainly worth reading if you have the interest---and it's courtesy of reader M.A.  There was also an article in Newsweek on this subject as well datelined Wednesday---and it's headlined "A Year After Annexation by Russia, Crimea Remains Bitterly Divided".  I'll leave it up to you to decide which one to believe---and I've already made up my mind.

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Russia Under Attack — Paul Craig Roberts

While Washington works assiduously to undermine the Minsk agreement that German chancellor Merkel and French president Hollande achieved in order to halt the military conflict in Ukraine, Washington has sent Victoria Nuland to Armenia to organize a “color revolution” or coup there, has sent Richard Miles as ambassador to Kyrgyzstan to do the same there, and has sent Pamela Spratlen as ambassador to Uzbekistan to purchase that government’s allegiance away from Russia. The result would be to break up the Collective Security Treaty Organization and present Russia and China with destabilization where they can least afford it.

Thus, Russia faces the renewal of conflict in Ukraine simultaneously with three more Ukraine-type situations along its Asian border.

And this is only the beginning of the pressure that Washington is mounting on Russia.

On March 18 the Secretary General of NATO denounced the peace settlement between Russia and Georgia that ended Georgia’s military assault on South Ossetia. The NATO Secretary General said that NATO rejects the settlement because it “hampers ongoing efforts by the international community to strengthen security and stability in the region.” Look closely at this statement. It defines the “international community” as Washington’s NATO puppet states, and it defines strengthening security and stability as removing buffers between Russia and Georgia so that Washington can position military bases in Georgia directly on Russia’s border.

This absolute must read commentary by Paul appeared on this website yesterday sometime---and the first reader through the door with it was Brad Robertson.

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Drills for me but not for thee: NATO launches war games near Russian border

Despite being quick to condemn Russian military manoeuvers, NATO is conducting wide-scale war games in the Baltic states and creating a “line of troops” across Eastern Europe. The US denies a double standard, but records and transcripts suggest otherwise.

Thousands of U.S. troops and hundreds of tanks have poured into Estonia, Latvia and Lithuania in the past two months as part of an operation dubbed “Atlantic Resolve.” In February, 140 NATO vehicles and 1,400 troops swept through Narva, a mere 300 meters from the Russian border.

As you connect countries, there is almost a line of U.S. troops,” Defense News quoted Col. Michael Foster of the 173rd Airborne Brigade on March 2 as saying. U.S. forces have previously held joint war games with Baltic nations, with names such as “Saber Strike,” “Spring Storm” and “Flaming Sword.”

When asked why the U.S. was condemning Russian exercises inside Russia, State Department press official Jeff Rathke told Russia Today that no such statement had ever been made.

This Russia Today story was posted on their Internet site at 3:13 a.m. Moscow time on their Saturday morning---and I thank Roy Stephens for sliding it into my in-box in the wee hours of this morning.

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Kaspersky slams Bloomberg report on company’s alleged ties to Russian ‘spies’

Eugene Kaspersky, founder and CEO of the multibillion dollar private software security group, slammed the recent Bloomberg article as “sensationalist” and “false,” asking whether it could be linked to Equation Group revelations by his firm.

The Bloomberg article, with the catchy headline “The Company Securing Your Internet Has Close Ties to Russian Spies” was published on Thursday.

It alleges that Kaspersky Lab, a private software security company owned by Russian national Eugene Kaspersky, ignores Russian electronic espionage cases , while only unveils cybercrimes in the “U.S. , Israel, and the E.U.

You have to wonder how low the American media will stoop?  This article appeared on the Russia Today website at 7:08 p.m. Moscow time on Friday evening, which was 12:08 p.m. EDT.  It's courtesy of Roy Stephens once again.

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U.N. ruling raises hope of return for exiled Chagos islanders

Britain acted illegally in the way it has exercised territorial control over the Chagos Islands, a U.N. tribunal has ruled, raising questions over the U.K.’s claim to sovereignty and offering hope of return to hundreds of evicted islanders.

In a withering judgment, the U.K. is accused of creating a marine protected area (MPA) to suit its electoral timetable, snubbing the rights of its former colony Mauritius and cosying up to the United States, which has a key military base – allegedly used for the rendition of terrorist suspects – on the largest island, Diego Garcia.

The ruling effectively throws into doubt the U.K.’s assertion of absolute ownership, restricts the Americans’ ability to expand their facility without Mauritian compliance and boosts the chances of exiled Chagossians being able to return to their homeland.

This is the second story on this issue that I've posted in this column in the last few weeks---and is one of these stories that's worth reading only if it's of interest.  Not surprisingly, it's courtesy of Roy Stephens as well---and it was posted on theguardian.com website on Thursday.

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Xinhua: China and Germany Deepen Financial Cooperation, Germany Joins AIIB and Supports RMB Inclusion Into SDR

China and Germany conducted their first high-level financial dialogue here on Tuesday and agreed to strengthen macro-economic policy coordination, develop policy dialogue and pragmatic cooperation in fiscal and financial areas.

Representing China at the first China-Germany High Level Financial Dialogue, Chinese Vice Premier Ma Kai said the dialogue was established after a decision reached by leaders from both countries during Chinese President Xi Jinping’s visit to Germany last year. The main task of this dialogue is to implement agreements reached by leaders of the two countries, he added.

Ma said that confronted with a complex and fragile global economic situation, China and Germany as important economies should strengthen policy coordination, coordinate strategic cooperation, deepen financial and fiscal cooperation, consolidate and develop the positive momentum of both economies to make further contributions to the steady growth of the world economy.

Representing Germany at the dialogue, German Finance Minister Wolfgang Schaeuble and Deutsche Bundesbank President Jens Weidmann said that Germany and China have been working together very well both bilaterally and multilaterally in financial and fiscal areas.

This story, filed from Berlin, was originally posted on the news.xinhuanet.com Internet site on Tuesday---and showed up under Koos Jansen's name yesterday on the bullionstar.com Internet site

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The Asian Infrastructure Investment Bank: China's financial power play?

The end of World War II marked a time of change and rebuilding, with a new political and economic order.

It saw the creation of the World Bank, and the International Monetary Fund, or IMF - institutions dominated then, and since, by the economic powers of the day, namely the United States and Europe.

China has been challenging that pecking order, as it emerged as the world's second biggest economy, and it's now backing a new development bank.

The Asian Infrastructure Investment Bank will be based in Beijing. And Europe's biggest economies are among nations defying the US to become founding members.

This 24:50 minute video interview/panel discussion was posted on the aljazeera.com Internet site at 7:30 p.m. GMT on Thursday---and it's the final offering of the day from Roy Stephens---and I thank him on your behalf, dear reader.

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Norfolk Island self-governance 'diabolical'

The Australian federal government has described Norfolk Island's self governance as "diabolical" as it moves to scrap the territory's parliament.

But the island's chief minister says replacing the parliament with a regional council is a disappointing decision that is being imposed on unhappy locals.

The government will introduce legislation next week to strip Norfolk Island of the self governance it has enjoyed since 1979. The island's legislative assembly will be temporarily replaced by an advisory council, before local government elections in 2016.

This short and interesting news item appeared on the Australian Internet site news.com.au on Thursday afternoon local time---and I thank New Zealand reader Bob Hays for finding it for us.

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Sprott Money Weekly Wrap Up With Eric Sprott

Listen to Eric Sprott share his thoughts on the U.S. Federal Reserve’s recent policy statement, Greece’s approaching deadline with the European Union, and the outlook on gold.

This 7:23 minute audio interviews was posted on the sprottmoney.com Internet site yesterday.

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SGE Withdrawals 51 Tonnes in Week 10, YTD 508 Tonnes

Withdrawals from the Shanghai Gold Exchange, a proxy for China's gold demand, were 51 tonnes for the most recent week reported, Bullion Star market analyst and GATA consultant Koos Jansen reported yesterday, continuing a strong pattern.

Koos slid this short commentary into my in-box yesterday---and I thank Chris Powell for the above paragraph of introduction.

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Goldman, UBS Join Former 'Fixing' Banks for New LBMA Gold Price

The new London Bullion Market Association Gold Price went live for the first time on Friday, with Goldman Sachs and UBS joining the four members of the now-defunct gold "fix" in setting its electronic replacement.

Goldman and UBS joined Barclays, HSBC, Bank of Nova Scotia, and Societe Generale to set the new benchmark gold price, administered by ICE Benchmark Administration, at 10:30 GMT on March 20.

The first LBMA Gold Price was set at $1,171.75 an ounce, after five rounds of an auction to strike a balance between bids and offers.

"The London gold fixing was eclipsed today," Ross Norman, chief executive of Sharps Pixley, said. "The key question is: Will users have the necessary confidence in the number? My gut feeling is that, with six participants, yes is the answer."

When Ross Norman gives it the thumbs up, that should make you want to run screaming in the opposite direction.  The new "fix" is loaded wall-to-wall with "da boyz"---and I must admit that I was surprised to see Goldman's name pop up.  This Reuters story, filed from London, appeared on their website at 1:16 p.m. EDT yesterday afternoon---and I found it embedded in a GATA release.

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UPDATE: No Chinese banks in new London Gold Fixing system – yet

The new benchmarking process for gold in London has begun today, but without any direct Chinese involvement as yet. The new London Gold Fix – or LBMA Gold Price – as it is now called is beginning with only a small change from the participants in the old system – Barclays, HSBC, SocGen and Bank of Nova Scotia, will now be joined by UBS and Goldman Sachs to make up the number to six.

According to the LBMA there is as yet going to be no direct participation by any of the three Chinese banks which have expressed interest in joining and would appear to qualify for inclusion under the strict guidelines for doing so. The first new LBMA Gold Price benchmark price under the new system came in at $1171.75 at 10:30 am GMT this morning.

For the new London gold benchmarking system to have any real validity in the eyes of many of those out there who rely on the twice daily announced gold price ‘fixes’ the sooner more participants, including most importantly the Chinese, are seen as direct participants in the process the better. Otherwise it will be seen as ‘same old same old’ and will inevitably lead to the eventual setting up of a rival gold ‘fixing’ process in the main gold consuming part of the world in Asia.

Indeed the eventual disclosure that the new additional Direct participants in the LBMA Gold Price are Goldman Sachs and UBS will add fuel to the flames of those who believe that the big bullion banks will continue to control the gold price. Maybe that was why the LBMA and IBA would not announce who the participants were right up to the time the first pricing was announced.

Lawrie Williams nails it with these comments.  It's now a group of six crooks instead of the four crooks we had before.  This must read commentary was posted on the mineweb.com Internet site at 12:24 p.m. GMT yesterday---and the first person through the door with it was Dan Lazicki.  Lawrie also had additional comments over and above what he had to say in his Mineweb article---and that's headlined ''Is the new LBMA Gold Price just another Fix? $1171.75 the first new benchmark price"---and it's worth reading as well.  It's also courtesy of Dan L.

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China to Allow More Gold Importers in Effort to Expand Market

China will allow more miners, smelters and other participants in the gold market to import bullion as it tries to expand trade in the world’s second-largest market.

Miners and smelters who meet certain production and investment conditions, as well as precious-metals coin makers and banks that are members of state-approved gold exchanges, will be able to import and export from China, according to rules jointly released Thursday by the country’s central bank and customs authority.

China is pushing to broaden the country’s gold trade as part of its efforts to link the mainland to global markets. The country began offering international institutions access to yuan-denominated gold contracts in Shanghai’s free-trade zone in September.

This short Bloomberg article, filed from Shanghai, appeared on their Internet site at 5:11 a.m. Denver time on Thursday morning---and I thank Casey Research's BIG GOLD editor Jeff Clark for bringing it to my attention, and now to yours.

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Romania gets its gold back -- after 1,900 years

The first of what archaeologist Barbara Deppert-Lippitz calls the "most sensational finds of the last century" surfaced not in a museum but at Christie's in New York. Among more than a hundred pieces of ancient jewelry for sale on December 8, 1999, was Lot 26, a spiraling, snake-shaped gold bracelet that the auction house identified as a "massive Greek or Thracian gold armband."

Christie's estimated it would sell for as much as $100,000. When the bidding stalled at $65,000, the sale was called off -- and the bracelet and its owner disappeared back into the shadowy underworld of ancient artifacts.

It took years for archaeologists and law enforcement officials in Romania to connect the armband to reports of looting in the country's central mountains. Though it has never been recovered, Lot 26 set off an international search to recover the lost heirlooms of Dacia, an empire that was once a mighty rival to ancient Rome.

This very interesting gold-related news item appeared on the nationalgeographic.com Internet site yesterday---and I found it on the gata.org Internet site---and it's certainly worth readingThe photos alone are worth the trip.

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¤ The Funnies











Arena Minerals has adopted a project generator model which will greatly reduce potential dilution and allow the company to deploy budget and expertise of exploration that it could not have achieved on its own. Recently, the Company has partnered with B2Gold for a commitment of $20M in exploration and is working on other joint ventures for other parts of the property, which is located in Chile in the hearth of the world’s most prolific mineral belt. The land has been in the hands of an industrial mineral conglomerate for a century and hasn’t been explored for metallics. Several high potential targets have already been identified. Please follow us for continual updates on drilling activity.

 

¤ The Wrap

Since I believe we are close to the maximum point of technical fund selling and, therefore, maximum commercial buying, more attention should be placed on what the next rally will look like, rather than how much more we have to go to the downside. I know that market sentiment is so depressed, as a result of the non-stop deterioration of price these past four years, that it is natural for most to expect that the next silver price rally will be in the mold of all previous rallies, namely, anemic and capped by aggressive commercial selling. That may turn out to be the case, but that outcome is not written in stone. The possibility of a price explosion, instead of a manipulated price capping, looms as large as ever; perhaps more than it ever has before. - Silver analyst Ted Butler: 18 March 2015

Today's pop 'blast from the past' dates from 1970---and I remember spinning this 45 on CHAR-FM radio in Alert, N.W.T. [now Nunavut] back then.  That was about 44 years ago.  Where the hell has all that time gone?  This British rock band was basically a 'one hit wonder'---but what a hit it was.  The link is here.

Today's classical 'blast from the past' is one that I haven't posted for many years, but thought it worth revisiting today.  It's Tchaikovsky's violin concerto in D major, Op. 35---which he composed in 1878 when he was in Switzerland.  As with most works of great virtuosity and technical difficulty in that era, the work did not meet with universal acclaim at the outset---and it took a number of years for it to become as wildly popular as it is today.

Here's one of my most favourite soloists doing the honours, the luscious and incredibly gifted Dutch violinist Janine Jansen.  The Frankfurt Radio Symphony Orchestra accompanies---and Paavo Järvi conducts.  The link is here.

I must admit that I wasn't expecting a decent rally in any of the precious metals yesterday, but was very happy to see them nonetheless.

But with the latest Commitment of Traders Report showing the bottom of the barrel from a contracts perspective, I'll restate what I said earlier this week---and that was that the bottom was in on Tuesday for all four precious metals---and it appeared from the numbers that everything was reported in a timely manner.

Here are the 6-month charts for all four precious metals, along with dollar index.

Now we have to address what happens next.  Gold volume was very reasonable yesterday---and that's because no moving averages of any importance were penetrated to the upside, so the technical funds in the Managed Money category were not being induced into covering any of their short positions, or actually going long.

The same can't be said for silver, as volume exploded as two of the three critical moving averages were pierced---the 20 and 50-day moving averages---and the technical funds began to cover their short positions---and the traders in the Commercial category sold their longs, or bought the offered short positions themselves.

As is always the case, per Ted Butler's quote above, it's the interplay between the Commercial traders---"da boyz"---and the technical traders in the Managed Money category is what will determine how far these rallies go---and both of us will be watching them carefully going forward.

I wasn't entirely surprised to see "all the usual suspects" as players in the "new and improved" London gold fix.  Nothing has changed, or will change----and even the addition of one or more Chinese banks in the future probably won't make a difference.

As long as precious metal prices are controlled, particularly gold and silver, the prices of all other commodities can be broadly held in check as well.  In this way, the powers that be can keep the commodity producing nations in line, because if individual countries were being paid free-market price for the commodities they produce, then the economic order of things would certainly change---and it's for precisely that reason that prices are being suppressed.

And not that I want to beat this commentary by Peter Warburton to death, but he nailed it back in April 2001 with what I still consider to be the three most important paragraphs ever written on the subject---and their even more true today than they were back then.  Here they are once more.

What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts. On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur. On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the U.S. dollar, but of all fiat currencies. Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.

It is important to recognize that the central banks have found the battle on the second front much easier to fight than the first. Last November I estimated the size of the gross stock of global debt instruments at $90 trillion for mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably, no more than $200 billion, using derivatives. Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world's large investment banks have over-traded their capital [bases] so flagrantly that if the central banks were to lose the fight on the first front, then the stock of the investment banks would be worthless. Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.

Central banks, and particularly the U.S. Federal Reserve, are deploying their heavy artillery in the battle against a systemic collapse. This has been their primary concern for at least seven years. Their immediate objectives are to prevent the private sector bond market from closing its doors to new or refinancing borrowers and to forestall a technical break in the Dow Jones Industrials. Keeping the bond markets open is absolutely vital at a time when corporate profitability is on the ropes. Keeping the equity index on an even keel is essential to protect the wealth of the household sector and to maintain the expectation of future gains. For as long as these objectives can be achieved, the value of the U.S. dollar can also be stabilized in relation to other currencies, despite the extraordinary imbalances in external trade.

That's all I have for today---and the week.

Enjoy what's left of it---and I'll see you here on Tuesday---Wednesday, west of the International Dateline.

Ed Steer