Gold & Silver Daily
"Sooner or later the forces of nature---and the markets---will not be denied"
 

¤ Yesterday In Gold & Silver

There wasn't a lot of price action in gold yesterday.  What action there was occurred between the noon silver fix in London---and the Comex close in New York.

The high and low tick are barely worth the effort of looking up---and the CME Group recorded them as $1,242.10 and $1,232.00 in the December contract.

Gold finished the Friday session at $1,238.20 spot, down 70 cents from Thursday's close.  Net volume was very much on the lighter side at only 109,000 contracts.

The price chart in silver looked very similar to the gold chart---and silver traded in a two bit range for the entire day.

The high and low in silver were recorded as $17.44 and $17.22 in the December contract.

Silver closed in New York yesterday at $17.27 spot, down 9.5 cents from Thursday's close.  Net volume was pretty light at only 25,000 contracts.

Platinum rallied right from the moment that the markets opened in New York on Thursday evening, but that ended/got capped just after 10 a.m. Hong Kong time.  It got sold down a bit going into the Zurich open---and then didn't do much for the remainder of the day.  Platinum closed up 12 bucks.

Palladium also rallied in the early going---and then developed a negative bias around noon Hong Kong time---and slid a hair until about 10:15 a.m. in Zurich.  Then it rallied anew until noon Europe time---and then traded pretty flat for the remainder of the Friday session, closing up 13 dollars.

The dollar index closed late Thursday afternoon in New York at 84.96---and then chopped around before sliding to its 84.77 low at precisely 8 a.m. in New York.  The subsequent rally topped out at 85.23 around 11:25 a.m. EDT---and it didn't do a lot for the rest of the day.  The index finished back above the 85.00 mark at 85.20.

The gold stocks spent all of two minutes in the black at the open of trading at 9:30 a.m. EDT yesterday---and it was all down hill from there, as the HUI closed virtually on its low tick of the day, down 3.47%.  This sell-off was out of all proportion to the tiny loss in the metal itself.

And as bad  as the gold shares performed, the silver equities got shelled, as Nick Laird's Intraday Silver Sentiment Index closed down an eye-watering 4.62%.  There was no reason for this magnitude of sell-off either.

The CME Daily Delivery Report showed that 230 gold and 72 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  In gold, it was the strangest thing, as Barclays was the only short/issuer with 230 contract out of its in-house [proprietary] trading account.  They were also the biggest long/stopper with 228 contracts in their client account. One has to wonder what that was all about.  In silver, the two short/issuers were Jefferies and ABN Amro with 52 and 20 contracts apiece.  There were four different long/stoppers, but Jefferies stopped 26 of them.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold's open interest in October declined by 129 contracts, and is now down to 837 contracts.  Silver's October open interest was unchanged at 174 contracts.  From these numbers, one must subtract the deliveries mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 7:44 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I was editing at 5:02 a.m. EDT this morning, I see that the folks over at the iShares.com Internet site showed a withdrawal from SLV of 1,150,380 troy ounces.

There was another sales report from the U.S. Mint.  They sold 6,000 ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and 50,000 silver eagles.

Month-to-date the mint has sold 42,500 troy ounces of gold eagles---17,000 one-ounce 24K gold buffaloes---3,100,000 silver eagles---and 400 platinum eagles.  Based on these sales, the silver/gold sales ratio stands at 52 to 1.

There was a small amount of gold shipped out of the Comex-approved depositories on Friday, as 2,411 troy ounces were withdrawn from Scotiabank's depository.

Of course, things were a lot different in silver.  Nothing was reported received, but a huge 1,716,910 troy ounces were shipped out the door---and the link to that action is here.

The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, October 14, was pretty much what I was expecting to see in both silver and gold.

In silver, the Commercial net short position was virtually unchanged, as it only declined by 20 contracts, which isn't even a rounding error.  The Commercial net short position still sits at 16,260 contracts, or 81.3 million ounces.

But under the hood in the Disaggregated COT Report, things were a little different, but in a good way.  The Managed Money in the technical fund category sold another 572 long contracts and went short an additional 1,226 contracts.  That, I believe is a new record short position in the Managed Money category, so the rubber band is stretched about as tight as it can get in silver.

Ted Butler said it appeared that JPMorgan covered another 500 contracts of their short-side corner in the Comex silver market, which is another new low since they inherited that gargantuan short position from Bear Stearns back in 2008.  They now hold 10,000 contracts net short, or 50 million ounces, which is a sizeable chunk of the total Commercial net short position which, from two paragraphs ago, worked out to 81.3 million troy ounces.

In gold, the Commercial net short position increased by a rather chunky 15,416 contracts, or 1.54 million ounces of paper gold---and that's all because of the rally in gold during the reporting week.  The Commercial net short position in gold is now up to 7.88 million troy ounces.

The traders in the Managed Money category accounted for most of the buying as they went net long to the tune of 12,333 contracts.

Ted said that JPMorgan sold another 3,000 contracts of their long-side corner in the Comex gold market---and their long position is now down to 18,000 contracts, or 1.8 million ounces.

And because of last week's rally in gold, Ted's concern now is that gold has become vulnerable to a sell-off, as the Commercials may attempt to engineer a decent price decline in order to force these newly minted long contract holders into puking up all these long contracts they just bought.

As it stands three days after Tuesday's cut-off, the traders in the Managed Money category are pretty much maximum short in all of the 'Big 6' commodities now, except for gold.  'Da boyz' may certainly be tempted to make it six out of six.

We'll see.

Since this is my Saturday column, I get to unload my in-box---and I have quite a few for you today that I've been saving from earlier in the week.

 

¤ Critical Reads

Mike Maloney: Massive Market Divergence in 3 Charts

In his latest video update, Mike Maloney shows one of the most concerning data points for today's stock markets: decreasing volume. This is happening even while markets are levitated by Federal Reserve stimulus and negative interest rates.

After showing the volume action of the DOW, Maloney adds his thoughts: "This is not a healthy market. This means that less and less of the real investors are in there, and more and more of this is black box trading. The problem with that is that when the markets change every black box is going to be selling at once, so what is being set up here is probably the biggest market crash in history."

This 4:19 minute video clip by Mike was posted on the hiddensecretsofmoney.com Internet site on Tuesday---and I've been just too busy to get to it.  It's definitely worth watching---and there's a transcript [with charts] as well.

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Doug Noland: The Downside of "Do Whatever it Takes"

Considering the global backdrop, I actually see a curious lack of extreme views (at least from the bear side). Instead, we’re at the stage of the cycle where even “bearish” pundits go out of their way to distance themselves from “the world is ending” prognosis. I guess I would be considered an extremist, though I don’t see the world ending anytime soon. But this week did offer further evidence that history’s greatest financial Bubble is at significant risk.

Friday’s rally did a lot to paper over what was a disturbing week for global markets. The mini-melt-up successfully took a great deal of value out of index and stock put options that expired Friday. Those wanting market protection will now have to pay up for expensive puts that expire in November, December or later.

But don’t let the S&P 500’s modest 1.0% decline fool you. It was an extraordinary week. Japan’s Nikkei index was hammered for 5.0%, increasing 2014 losses to 10.8%. Japanese two-year yields traded to a record low 0.005%. After beginning the week at 6.60%, Greek 10-year bond yields traded to 9% on Thursday (before closing the week at 8.07%). Wild instability returned to European debt (and equities) markets. Portugal’s 10-year yields were up 75 basis points by Thursday, before a rally cut the week’s increase to 35 bps. Germany’s DAX equities index dropped 2.87% on Wednesday then rallied 3.12% on Friday. Italian stocks sank 4.44% and then rallied 3.42%.

If only Bubbles lasted forever. And, unfortunately, the longer they persist and the bigger they inflate, the more problematic the unavoidable collapse. This important reality is ignored at everyone’s peril. Determination to avoid collapse only ensures greater and more precarious Bubble distortions and maladjustment. “World Braces as Deflation Tremors Hit Eurozone Bond Markets,” read another U.K. Telegraph headline. And Bullard and the global central bank community fret a “collapse in inflation expectations.” It is important to recognize that disinflation and collapsing “inflation expectations” are symptomatic of a bursting global financial Bubble. They provide early evidence of what will be a spectacular failure in experimental “activist” central banking.

Doug doesn't miss a thing in this week's edition of his Credit Bubble Bulletin, posted at the prudentbear.com Internet site yesterday evening.  It certainly falls into the absolute must read category.

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Jim Rickards on Fox Business News

The first part of this interview runs for 3:33 minute---and is linked here.  The second part of the video interview runs for 1:24 minutes---and it's linked here.  You've heard some of this before, but some of it has been modified---and there's new material as well.  I thank reader Harold Jacobsen for sending it our way.

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Friday Humor: Forget QE4, Presenting QE5

Forget helicopters---here's the future of central-planning.

Don't leave The Eccles Building without one.

I thank Joe Nordgaard for sending this Zero Hedge funny, which he sent our way in the wee hours of this morning.

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Sprott Money Weekly Wrap Up

Listen to Eric Sprott Share his Views on Ebola, the Economic Slump Around the World and the Disingenuousness in the Precious Metals Markets.

Jeff Rutherford interviews Eric for 15:17 minutes---and the audio commentary was posted on the sprottmoney.com Internet site yesterday.  It's a must listen, especially the first part where discusses the current Ebola situation.

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The CIA owns everyone of any significance in the major media.”

As a former member of the major media prior to its concentration in few hands by the Clinton regime, I have reported on many occasions that the Western media is a Ministry of Propaganda for Washington. In the article below one of the propagandists confesses. -Paul Craig Roberts

Published on Russia Insider News

“The CIA owns everyone of any significance in the major media.” — former CIA Director William Colby

Our Exclusive Interview with German Editor Turned CIA Whistleblower

Fascinating details emerge. Leading U.S.-funded think-tanks and German secret service are accessories. Attempted suppression by legal threats. Blackout in German media.

Repenting for collaborating with various agencies and organisations to manipulate the news, Ulkotte laments, “I’m ashamed I was part of it. Unfortunately I cannot reverse this.

This absolute must read commentary showed up on the Paul Craig Roberts website on Thursday sometime---and my thanks go out to Roy Stephens for his first contribution of the day.

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James Perloff: A Century of Mainstream Media Lies

Newspapers were the first vehicle that mainstream media (MSM) used to manipulate Americans into war. The Spanish-American War (1898) was fought over Cuba, which had been a colony of Spain since 1511. By the 19th century, Cuba had become the world’s wealthiest colony and largest sugar producer, and its assets were coveted by the Illuminist cabal, which also wanted Spain neutered as a world power. National City Bank, then America’s preeminent bank, controlled the McKinley White House, loaned the government $200 million to fight the war, and took control of Cuba’s sugar industry afterwards (see Ferdinand Lundberg’s classic 1937 book, America’s Sixty Families).

To get young men to fight and die in Cuba for the banksters, it was necessary to persuade Americans – for the first time – that the U.S. military’s duty was not only self-defense, but “righting wrongs” overseas. It was before and during this war that the media honed a skill that would prove perennially useful: manufacturing fake atrocity stories.

The “Yellow Press,” as it was then appropriately called, was spearheaded by William Randolph Hearst’s New York Journal and Joseph Pulitzer’s New York World. Together they fabricated outlandish atrocity tales about Cuba, such as Spaniards roasting Catholic priests. On October 6, 1896, Hearst’s Journal carried this headline: “CUBANS FED TO SHARKS. Cries Heard at Night – They are Taken Outside the Harbor, and the Silent Ferryman Comes Back Alone.” Pulitzer’s World raved: “RAIDED A HOSPITAL– More than Forty Sick and Wounded Cubans Butchered.” But no hospital even existed in the region the World described.

Hearst’s reporters rarely ventured outside Havana’s bars. Some never even traveled beyond Florida, where they forwarded tales spun by Cuban émigrés. And some stories Hearst invented himself in New York.

I've read James Perloff's classic tome "The Shadows of Power: The Council on Foreign Relations and the American Decline."  It's right up there with G. Edward Griffin's "The Creature From Jekyll Island: A Second Look at the Federal Reserve"---and if you haven't read these two books, it's not too late to correct that oversight.  And, like the Paul Craig Roberts piece posted above, this falls into the absolute must read category as well.  I thank South African reader B.V. for sending it our way last Sunday, but for content reasons, it had to wait for today.

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Kudos to Herr Weidmann For Uttering Three Truths in One Speech

Once in a blue moon officials commit truth in public, but the intrepid leader of Germany’s central bank has delivered a speech which let’s loose of three of them in a single go. Speaking at a conference in Riga, Latvia, Jens Weidmann put the kibosh on QE, low-flation and central bank interference in pricing of risky assets.

These days the Keynesian chorus in favor of policy activism is so boisterous that a succinct statement to the contrary rarely gets through—-especially at Rupert Murdoch’s Wall Street yarn factory. But here’s what penetrated even Brian Blackstone’s filters:

The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.

This commentary appeared on David Stockman's website on Wednesday---and I thank Mark Hancock for sharing it with us.

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Handelsblatt: "Four German Banks on the Brink"

Several days ago we were confused why, out of the blue, a €1 billion loan BWIC appeared that was dumping German non-performing loans. After all, the whole point of the European "recovery" fable to date has been to deflect all the attention from the "pristine" German banks, up to an including world-record derivatives juggernaut Deutsche Bank,  and to focus on Greece and other insolvent peripheral European nation. Earlier today, German Handelsblatt provided an answer, when it reported that "four German banks are on the brink", i.e., four banks of which three are known, HSH Nordbank, IKB and MunchenerHyp, will likely fail the ECB's stress test whose results are due to be announced next Friday.

Keep in mind that this is a significant fraction of the 24 German banks that are undergoing the ECB's Stress farce test. So one wonders: if one in six German banks is so unsafe even the ECB (which kept Cypriot banks going well past their insolvency) will give them a black stamp (because in Europe failing a bank stress test is first of all impossible since both Bankia and Dexia passed theirs with flying colours, but more importantly a death sentence), what does that leave for the rest of Europe's banks, all of which are in far more dire shape than sleepy Germany?

This very interesting news item appeared on the Zero Hedge website at 11:05 a.m. EDT on Thursday morning---and it's the first offering of the day from Manitoba reader U.M.

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The Reckoning: Helmut Kohl Tapes Reveal a Man Full of Anger

Schwan recorded more than 600 hours of interviews with Kohl in a total of 105 conversations between March 12, 2001 and October 27, 2002. Even during his tenure in office, Kohl had ruminated over his place in history. He sees himself on a level with former German Chancellors Otto von Bismarck, Konrad Adenauer and Willy Brandt. He is probably justified in doing so.

In the Schwan conversations, Kohl's objective was to document his own view of the Kohl era -- they are an extremely valuable treasure for historians. And the tapes served as the basis for Kohl's three-volume memoirs, which were ghost-written by Schwan. The relationship between the two, however, has soured of late, with Kohl having sued Schwan for possession of the tapes, a spat which is likely to worsen with the release this week of Schwan's book about the interviews.

The interviews contain, at least in part, Kohl's "historic legacy," according to the December 2013 ruling of a Cologne court on the ownership of the tapes. And they add new facets to Kohl's image. They reveal him to be a man who views both his rivals and the world at large through the lens of a calculating machtpolitiker (power politician).

This long 4-part exposé appeared on the German website spiegel.de late Tuesday afternoon Europe time---and for content and length reasons, had to wait for today's column.  It is, of course, courtesy of Roy Stephens.

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Europe will reconcile with Russia, and soon. It can’t afford not to

After months of escalating tensions over Ukraine and talk of a new cold war, Russia and the West could soon reach a surprising rapprochement. The eurozone economy is suffering badly and sanctions against Russia are partly to blame. Winter is also upon us, and that reminds every-one Vladimir Putin still holds the cards when it comes to supplying gas.

The clincher, though, is that Ukraine is heading towards financial meltdown. Unless an extremely large bailout is delivered soon, there will be a default, sending shock waves through the global economy. That’s a risk nobody wants to take — least of all Washington, London or Berlin.

Sanctions against Russia were always going to hit western Europe hard. The eurozone did 12 times as much trade with Russia as the United States did last year — that’s one reason Washington’s attitude towards corralling Russia’s economy has been somewhat more gung-ho.

This article appeared on the spectator.co.uk Internet site on Friday---and it's another contribution from reader B.V.

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Putin says gas deal with Ukraine for winter months only, Poroshenko says no deal at all

Kiev and Moscow have failed to resolve their gas supplies dispute, Ukrainian President Petro Poroshenko said after meeting Russia’s leader. According to Putin, only an agreement for winter supplies has been reached, but details are still to be worked out.

“We agreed on the basic parameters of the gas contract,” Poroshenko told reporters in Milan where leaders from Europe and Asia gathered for the ASEM Summit. According to the Ukrainian president, the Ukrainian side is looking for sources of funding to pay off the arrears.

The optimistic statement came after Poroshenko met with Russian Energy Minister Aleksandr Novak and the head of Gazprom Aleksey Miller.

But emerging from a meeting Russia’s President Vladimir Putin later in the day, the Ukrainian leader said that no agreement had been reached. New talks have been scheduled for October 21; the E.U. is once again set to mediate the process.

This story showed up on the Russia Today website at 1:19 p.m. Moscow time on their Friday afternoon, which was 5:19 a.m. in New York.  It's the second offering of the day from Roy Stephens.

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Putin: Ukraine's new Donbass law 'not perfect, but a step in right direction'

The new law giving special status to troubled regions in eastern Ukraine is 'not perfect,' but might be used to finally stabilize the situation in the area, Russian President Vladimir Putin said after a meeting with his Ukrainian counterpart in Milan.

"Perhaps it's not a perfect document, but it's a step in the right direction, and we hope it will be used in complete resolution of security problems," Putin said after closed-door talks with Ukrainian President Petro Poroshenko on Friday.

The two presidents met in Milan privately on the sidelines of the Asia-Europe Meeting (ASEM), a summit of Asian and European leaders.

The document on special status for the Donetsk and Lugansk regions was signed by Poroshenko on Thursday.

This Russia Today news item was posted on their Internet site at 5:51 p.m. Moscow time yesterday afternoon---and it's another contribution from Roy Stephens.

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Putin says both sides in Ukraine’s conflict fail to implement Minsk accords

Russian President Vladimir Putin said that the warring sides in Ukraine are not implementing the Minsk accords to the full extent.

“The landmark for Ukraine’s settlement must be the Minsk agreements,” Putin told reporters after the Asia-Europe Meeting summit. “Unfortunately, these agreements are not being implemented by the both sides, either by Novorossiya’s militias or by Ukraine’s representatives.”

The Russian president said that “the Minsk agreements are not being implemented to the full extent due to a number of reasons - objective and subjective.”

“I proceed from the fact that all the sides should work for putting these agreements into practice,” he said.

This news item, filed from Milan, appeared on the itar-tass.com Internet site at 10:15 p.m. Moscow time yesterday evening---and I thank Roy Stephens for sending it.

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U.S. dusted off old USSR-break-up strategy for use in Ukraine - former FSB chief

The current turmoil in Ukraine and the military conflicts in Georgia and the Caucasus are a direct result of the anti-Russian policy of the US administration, claims the former head of Russia’s Federal Security Service.

Nikolai Patrushev who headed the FSB from 1999 until 2008 said in an interview with the Russian government daily Rossiiskaya Gazeta that intelligence analysts established a current anti-Russian program being executed by American special services dates back to the 1970s, and is based on Zbigniew Brzezinski’s “strategy of weak spots”, the policy of turning the opponent’s potential problems into full scale crises.

The CIA decided that the most vulnerable spot in our country was its economy. After making a detailed model US specialists established that the Soviet economy suffered from excessive dependency from energy exports. Then, they developed a strategy to provoke the financial and economic insolvency of the Soviet state through both a sharp fall in budget income and significant hike in expenditures due to problems organized from outside,” Patrushev told reporters.

The result was the fall in oil prices together with the arms race, the war in Afghanistan, and anti-government movements in Poland, all of which eventually led to the breakup of the Soviet Union, said the former Russian security chief. He stressed that each of these factors bore hallmarks of US influence.

The Russians have long memories for those who transgress against them---and they certainly haven't forgotten what happened to them under Ronald Reagan back in the 1980s.  The piece I posted in yesterday's column headlined "How the Soviet Empire's Fall Was Engineered" is precisely what he's talking about in this Russia Today story.  It was posted on their website at 1:06 p.m. Moscow time on their Thursday afternoon---and this article is courtesy of reader B.V.

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Russian Foreign Minister Lavrov speaks to the World — Paul Craig Roberts

Dear Readers, I now have for you the complete English transcript of Russian Foreign Minister Sergey Lavrov’s speech to the United Nations. Lavrov’s speech, together with President Putin’s remarks in his Serbian press conference (excerpts posted on this site) clearly indicate that the moral leader of the world is Russia, not Washington.

The Russians have come out of tyranny as America descends into tyranny. Washington’s barbarity in the world is unprecedented. For 13 years Americans have permitted their government to bomb women, children and village elders in seven countries based entirely on lies and the selfish interests of the ruling elite. Washington has spewed depleted uranium everywhere, causing massive birth defects and health problems. We must remember that Washington is the only government that dropped nuclear weapons on helpless civilian populations. The victims were Japanese when the Japanese government was trying to surrender.

Putin’s warning to the White House Fool that humanity’s existence requires that Obama “remember what consequences discord between major nuclear powers could bring for strategic stability” is a pointed demand that the White House Fool halt Washington’s aggression toward Russia. We have had enough, Putin said. We are a patient people, but we are running out of patience with your idiocy.

This is long, but definitely worth reading if you have the time.  It was posted on Paul's Internet site yesterday---and once again it's Roy Stephens bringing this story to our attention.

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U.S. in controversial first talks with Syrian Kurdish party

U.S. officials have held direct talks for the first time with a Kurdish political party in Syria linked to Turkey’s PKK, seen by the U.S. and others as a terrorist organisation, the U.S. State Department said Thursday.

The talks with Syria’s Kurdish Democratic Union Party, known as the PYD, took place in Paris over the weekend and come as the U.S. seeks to build a wider coalition against the Islamic State group (IS).

“We have for some time had conversations through intermediaries with the PYD (Kurdish Democratic Union Party). We have engaged over the course of just last weekend with the PYD,” State Department spokeswoman Jen Psaki told a briefing.

The PYD has close ties to the PKK, a Turkish Kurdish party that waged a militant campaign for Kurdish rights and has threatened to abandon a peace process with Turkey in response to the current attack on the Syrian town of Kobane by IS militants.

This news story put in an appearance on the france24.com Internet site on Thursday sometime---and I thank Roy Stephens for another contribution to today's column.

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ISIS fighters withdraw from Syria's embattled Kobani - Russia Today sources

Islamic State fighters have been driven out of Kobani, the Kurdish town that straddles the Syrian-Turkish border, after weeks of heavy fighting, according to Kurdish sources speaking to RT.

A Kurdish commander said that ISIS retreated overnight – withdrawing by 2 km east and 9 km west.

The Kurds are now clearing the city. The Islamists have left behind suicide bombers hiding in the ruins of the various buildings in the city.

"We can still hear sporadic gunfire and explosions coming from Kobani," RT's Murad Gazdiev reports from the Turkish-Syrian border.

However, a victory announcement from the Kurdish fighters is yet to be made because the whole of the city has not been secured.

This news item showed up on the Russia Today Internet site at 12:15 p.m. Moscow time on their Friday afternoon, which was 4:15 a.m. EDT.  My thanks go out to Roy Stephens once again.

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The Chinese in Africa: Empire builders or new pioneers?

The influx of investment and people from China has become one of the defining narratives of Africa over the past two decades.

China, by all accounts, has identified Africa as the source of much-needed raw materials for its phenomenal growth, and Chinese business entrepreneurs see its sparsely populated interiors as a potential new frontier for manufactured goods.

This story of China in Africa has, however, largely been couched in government rhetoric and clouded by stereotypes.

Former New York Times Shanghai bureau chief Howard French attempts to lift the veil of secrecy that clouds many of the Chinese business dealings and give readers a glimpse of who the Chinese living and working in Africa really are.

This extremely interesting story is worth reading in my opinion.  It was posted on the South African website Mail & Guardian on Friday, October 10---and I thank South African reader B.V. for sending it our way last Saturday.

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China Flinches---and Injects $32 Billion Into Banks

The country's central bank will inject $32 billion into the country's banking system, according to The Wall Street Journal. The capital will go to 2o major and regional banks.

This is what the government refers to as "targeted easing," but many analysts say that these small jolts of stimulus will simply worsen China's mounting debt problems without solving the root of the issue.

"China’s debt problem lies with the corporate sector," wrote Societe Generale analyst Wei Yao in a recent note. "The cure should be capacity consolidation and debt restructuring, rather than another stimulus package targeted to boost investment demand."

This article showed up on the businessinsider.com website at 11:47 a.m. EDT on Friday morning---and it's the second-last contribution from Roy Stephens.

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China, Russia said to mull high-speed Moscow-Beijing rail line

China and Russia are considering building a high-speed rail line thousands of kilometres from Moscow to Beijing that would cut the journey time from six days on the celebrated Trans-Siberian to two, Chinese media reported Friday.

The project would cost more than $230 billion and be over 7,000 kilometres (4,350 miles) long, the Beijing Times reported -- more than three times the world's current longest high-speed line, from the Chinese capital to the southern city of Guangzhou.

The railway would be a powerful physical symbol of the ties that bind Moscow and Beijing, whose political relationship has roots dating from the Soviet era and who often vote together on the U.N. Security Council.

I had a companion story to this in yesterday's column headlined "China to put Russia on fast track to high-speed rail"---and that dealt with the new rail line from Moscow to Kazan, with a comment about the Beijing/Moscow system.  The above story is only about this huge project---and the Moscow/Kazan high-speed rail line is not even mentioned.

This AFP article appeared on the france24.com Internet site at 9:25 a.m. yesterday morning Europe time---and it's the final offering of the day from South African reader B.V., for which I thank him.

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North Korea in grip of leadership tension

North Korean leader Kim Jong-eun's extended absence from public view opened a flood gate of rumors. It went from a military coup to broken ankles, with gout, diabetes and obesity also mentioned. International concern with Kim's absence was justified, given the immense power this 31-year-old leader inherited from his father, Kim Jong-il, who passed away in December 2011.

An objective assessment of Kim's dismal performance during the past two-and-one-half years is compelling: North Korea has become a more isolated and despised nation. The missile launches, nuclear test, threats of a pre-emptive nuclear attack, the brutal execution of his uncle, Jang Song-thaek, and the routine vitriol coming out of Pyongyang all contributed to North Korea's pariah status.

Thus the initial hope that this young leader would move North Korea in a more positive direction gave way to despair, when North Korea assumed a more strident and belligerent attitude; an attitude that alienated its leadership from all countries, including China. It would not have been unreasonable to assess that this period of failed leadership was the catalyst for a military coup by those seniors in North Korea who wanted to reverse this negative trajectory; who wanted North Korea to engage economically with the international community and have United Nations sanctions lifted. Indeed, it could have been those in North Korea who wanted to re-establish North Korea's special relationship with a China that provides North Korea with the crude oil, aviation fuel and food aid necessary for the well-being of the country.

This commentary showed up on the Hong Kong website Asia Times site on Friday---and it's the final offering of the day from Roy Stephens, for which I thank him on your behalf.

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LBMA gets 8 proposals to replace century-old gold fixing

Intercontinental Exchange Inc., the London Metal Exchange, and CME Group Inc. and Thomson Reuters Corp. are among firms shortlisted to develop and run a replacement for the century-old London gold fixing benchmark.

Autilla Ltd. (Sapient) and EBS are also on the short list, the London Bullion Market Association said in a statement today. Ten companies submitted eight proposals, some of them joint.

The LBMA, which said last week firms will present at a seminar on Oct. 24, expects a market consensus to emerge next month and the chosen method adopted by year-end or early 2015.

The 'fix' will still be in no matter who runs it---and it certainly won't be any more transparent than it already is.  This Bloomberg story, filed from London, appeared on their website at 10:13 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.

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LBMA names Morgan Stanley as gold/silver market maker

The London Bullion Market Association (LBMA) said on Thursday it appointed Morgan Stanley as a market maker, underscoring the ambitions of some banks to expand into precious metals trading while others exit due to stringent regulations.

LBMA said it named Morgan Stanley & Co International Plc, a unit of U.S. investment bank Morgan Stanley, as a spot and options market-making member effective Thursday.

Currently, LBMA has 13 market makers which serve in either one, two or all three of the spot, options and forwards markets. They make markets by quoting two-way prices in both gold and silver products to other market makers.

Just three weeks ago, LBMA named Citigroup as a spot market-making member.

It's a very safe bet that Morgan Stanley and Citigroup are two of the big gold and silver shorts on the Comex---and handily fall into the 'Big 4' or 'Big 8' Commercial trader category.  They've always been there, but not as market makers.  I found this Reuters story, which was filed from New York yesterday, on the mineweb.com Internet site in the wee hours of this morning.

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LME takes battle to Washington after London warehouses win

Fresh from a court win in Britain, the London Metal Exchange now faces one of its biggest hurdles yet in its years-long crisis over its warehousing policy that consumers say has inflated prices: convincing U.S. lawmakers its reforms are enough.

When Britain's Court of Appeal handed a victory to the LME last week, knocking out a challenge to the reforms by Russian aluminum giant Rusal last week, the LME's head of business development, Matt Chamberlain, was in Washington, a source familiar with the matter said.

Chamberlain was there to plead the exchange's case with lawmakers who have been pushing for even greater change to the LME's warehouse policy.

Senator Sherrod Brown was among the people the LME visited, a spokeswoman for the Senator said. The Ohio Democrat has been a fierce critic of the LME, urging U.S. regulators to crack down on the 137-year old exchange, and threatening to write rules that would compel regulators to intensify oversight of the exchange on U.S. turf.

This Reuters news item, filed from New York, showed up on the mineweb.com Internet site on Friday sometime---and it's courtesy of Manitoba reader U.M.

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Riddle of inventory levels keeps platinum investors shy

Investors are unlikely to rush back into platinum any time soon after a minimal price reaction to its biggest-ever supply shock highlighted a major problem: no-one knows how much metal exists above ground or more importantly who holds it.

Analysts predicted a surging market as a record five-month labour stoppage in top producer South Africa wiped out more than one million ounces of output worth $1.28 billion.

Yet platinum, used mostly in automotive catalytic converters which clean up exhaust emissions, also failed to react to a 2.4 million ounce accumulation of metal into exchange-traded funds since 2010. The metal has lost seven percent this year and now sits close to 2009 levels around $1,200 an ounce.

Well, dear reader, I'd like to remind you of the two earlier stories in today's column about 'media lies and fabrications'---and I'd just like you to keep that it mind when you read this Reuters piece, filed from London yesterday---and posted on the mineweb.com Internet site.  It's the second offering in a row from reader U.M.

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“Save Our Swiss Gold ” - Game Changer For Gold?

We believe that the “Save Our Swiss Gold” campaign has the potential to be a game changer in the gold market - both in terms of the ramifications for the current global monetary system and in terms of higher gold prices. 

There has been a lack of coverage of this important story and there is therefore a lack of awareness about the possible implications for the gold market. Thus, in the weeks prior to the referendum on November 30th, we are going to analyse the referendum, the important context to the referendum and the ramifications of a yes or a no vote. - Mark O’Byrne, Head of Research, GoldCore

Here's another longish commentary on what the ramifications of a 'yes' vote in Switzerland will have on the gold market.  It's certainly worth reading if you have the time---and it was posted on the goldcore.com Internet site yesterday.  I thank reader M.A. for sending it along.

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Jim Rickards Interviewed for Anglo Far-East's Physical Gold Fund

This 40:15 minute interview conducted by John Ward appeared on the physicalgoldfund.com Internet site---and I thank Harold Jacobsen for sharing it with us.  But if you go through the list of topics being discussed, you'll see a lot of familiar themes, which I'm sure he's updated based on current events.

I haven't listened to it yet, but it will be on my "to do" list for today or tomorrow.

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China gold production seen falling, prompting more imports

Growth in gold mine output from number one producer China is set to slow significantly in coming years in the face of declining ore grades and waning profitability, analysts Business Monitor International said on Friday.

Lower mine production will pave the way for rising imports to meet persistent strength in demand from Chinese consumers, BMI analyst Xinying Chia said, while domestic mining companies will also look overseas to boost production.

In an interview with the Reuters Global Gold Forum, Hong Kong-based Chia said Chinese mine output growth was expected to slide to 0.9 percent in 2018, from around 6 percent this year.

"Many domestic miners are grappling with the problems of depleting reserves, falling ore grades and rising cash costs," Chia said.

This Reuters article, filed from London, appeared on their Internet site at 8:28 a.m. EDT on Friday---and it's another article I found posted on the gata.org Internet site.

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The sky is falling! Should you buy gold and silver?

Fear is stalking the global stock markets. Stock indices have been falling back sharply seeing a move to what might be seemed safer assets like bonds and gold. The falls have been precipitated by some poor economic data suggesting that most major economies are not out of the recessionary mire yet and, in the U.S. in particular, the realisation that the Fed is getting down to near eliminating its latest Quantitative Easing programme in total, although there may be some succour in that it tends to be putting back the day that it may allow interest rates to rise. And what happens in the U.S. markets tends to have a strong follow-through impact on markets in other parts of the world. 

A number of pundits have been predicting a stock market crash for some time now. The investing public though, just as it has in the past ahead of previous stock price crashes, has ignored this, seeing the market as an ever-increasing money-making mechanism. Thus the world’s major stock indices have been on a tear moving higher and higher without there being anything serious in the way of increasing corporate profits to support this. Suddenly it could all come crashing down – that’s what has happened in the past. While the Dow, S&P, TSX, FTSE, DAX etc. are not yet in free fall they are beginning to look like they could be heading that way.

So, should one buy gold as the safe haven it has proven to be in the past. Inflation – which is generally assumed to be gold-positive – just has not happened despite the vast amounts of liquidity the U.S. Fed and other central banks have pumped into the markets. Indeed much of the talk now is about the increasing possibility of deflation. What most don’t realise is that gold performs just as well, if not better, in a deflationary environment vis-a-vis the stock markets than it does in an inflationary scenario.

This commentary by Lawrence Williams showed up on the mineweb.com Internet site on Friday---and my thanks go out to Manitoba reader U.M. for her final offering in today's column.

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¤ The Funnies

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¤ The Wrap

While both fell about the same percentage over the past few months, some important distinctions between oil and silver are that silver is at record extremes of managed money short selling---and well below the cost of production for primary producers.  Crude oil prices may have fallen enough to reverse upward here or soon, but silver is more advanced on both counts. Plus, there are continued signs that the supply/demand situation is relatively tighter in silver than they are in crude oil.

Lastly, silver is a natural as a safe haven demand in what are increasingly tenuous financial times. Yes, it’s true that silver has been underperforming just about everything under the sun for some time, but that has only resulted in it becoming more of an outstanding undervalued asset. Silver investment demand has, can, and will turn into a torrent at a moment’s notice and if ever there were a time for it to soar, that time would appear to at hand. - Silver analyst Ted Butler: 15 October 2014

I've got two pop 'blasts from the past' for you today---and both by the same group, as they were the only two big hits they had back in the late 1970s---but what hits they were!  It's been more than a year since I posted them last, so it's time for a revisit.   The group is 'The Babys'---and although the name may not ring a bell, the tunes are classics.  The lead singer, John Waite, as wonderful as he is, is bested by the girls singing back-up vocals.  They're just terrific.  The link to the first recording is here---and the second one is linked here.

Today's classical 'blast from the past' was first performed in what is now called Oslo in Norway back on 24 February 1876.  It's the incidental music from Henrik Ibsen's 5-act play, Peer Gynt.  The play is not performed often in North America; but the music, written by Norway's legendary composer Edvard Grieg---who composed this music in his very early 30s---has found a permanent home in the classical repertoire---and rightfully so.

I, for one, never tire of listening to it.  This youtube.com video was uploaded on 05 May 2013---and has already had 675,000 hits, which is a monstrous number for a classical work.  The quality of the audio and video is first rate---and best watched 'full screen'.  The Spanish Radio and Television Symphony Orchestra [based out of Madrid] do the honours here---and the performance is as good as it gets.  Guillermo Garcia Calvo conducts. The link is here.

The memories of the potential for a global meltdown in all things paper---and the melt up in all things physical everywhere on Planet Earth on Wednesday---is almost a distant memory now.  There were lots of voice out there saying that everything was fine---and that there was "nothing to see here, folks---please move along."  But, as Doug Noland pointed out in his weekly Credit Bubble Bulletin in the Critical Reads section, The Truman Show continues---as "this past week did offer further evidence that history’s greatest financial Bubble is at significant risk."

That would be an understatement.

Since that event, the gold and silver prices have been mostly in lock down, even though JPMorgan et al continued to engineer the price lower on platinum, palladium, copper and crude oil, which continued up until trading ended on Thursday in New York.

Here are the 6-month charts for all the 'Big 6' commodities.  Copper matched its Thursday low tick in Friday trading---and platinum, palladium and copper all finished off their low ticks of Thursday.

Looking at the precious metal equities, the price action yesterday was out of all proportion to the intraday and closing price of these two metals---and that's not the first time that we've seen this counterintuitive share price action lately.

As I mentioned earlier this week, John Embry has always suspected [as have I] that the powers-that-be were actively intervening in the precious metal equity markets---and yesterday's share price action seemed to fall into that category as well.

Looking back at the week, it's a certainty that if it hadn't been for the Plunge Protection Team's active intervention in the markets at 9:40 a.m. EDT on Wednesday, it would certainly be a different world today.

Doug Noland put it this way: "I find the backdrop surreal. And the more everyone acts as if it’s all business as usual, the more worried I get. As crazy as I know it sounds, I am these days reminded of my bewilderment when studying the period leading up to the 1929 stock market crash. How could they not have seen it coming? How could everyone remain so bullish (“a permanently high plateau”) considering what in hindsight was an obvious – and quite ominous – deterioration in the market and global economic outlook. I also think often of a quote from that period: “Everyone was determined to hold their ground, but the ground gave way.” Can the world’s central bankers hold everything up?"

Who knows for sure, dear reader, but they've been at it in the U.S. ever since the PPT intervened in the crash of 1987---and 27 years later, the bubble in all thing paper has become global in scope.  The attempt by the world's stock markets to return to their intrinsic values on Wednesday was, once again, thwarted---but Jim Rickards' snowflakes continue to fall.

Sooner or later the forces of nature---and the markets---will not be denied.  At that point the Fed will get buried---and the ball will be in the IMF's court, SDRs in hand.   It's my bet that they'll be backed by gold---and the gold price used to back them will be many orders of magnitude higher than it is now.

Before heading off to bed, I'm excited to announce the premiere of Casey Research's documentary-style film on the only way for American’s to legally minimize their taxes without leaving the U.S. in America’s Tax-Free Zone, a FREE online video – which premiered on Thursday to the International Man audience.

This documentary runs almost half an hour and features a discussion of the current tax situation in Puerto Rico and, generally, how to take advantage of it---with guest commentators, Doug Casey and Peter Schiff, as well as several others.  You can check it out by clicking here.

That's all I have for the day---and the week.  I hope you enjoy what's left of your weekend---and I'll see you here on Tuesday---Wednesday if you live just west of the Dateline.