Gold & Silver Daily

¤ Yesterday In Gold & Silver

Gold had a slight negative bias all through Far East and early London trading on their Friday.  Someone tapped on the price at 1 p.m. in London, which was 20 minutes before the Comex open---and the selloff continued minutes after the open.  The low tick came shortly after the 9:30 a.m. open of the equity markets---and then chopped sideways into the 1:30 p.m. Comex close before rallying a bit into the close of electronic trading.

The high and low ticks were recorded by the CME Group as $1,184.40 and $1,168.40 in the June contract.

The gold price closed yesterday at $1,177.90 spot, down $6.10 from Thursday.  Net volume was pretty light at only 103,000 contracts.

Here's the 5-minute tick gold chart---and the only real volume spikes came at 8:30 and 10 a.m. EDT, which is 6:30 and 8:00 a.m. on this chart, so add two hours for EDT---and use the 'click to enlarge' feature.

The silver price didn't do much in Far East trading---and began to head lower at, or shortly before, the noon London silver fix---and it's low tick came around 10:30 a.m. EDT.  From 1 p.m. until the Comex close 30 minutes later the silver price rallied a bit, before trading sideways into the close of electronic trading.

The high and low in that precious metal was reported as $16.26 and $15.895 in the July contract.

Silver finished the day at $16.095 spot, down half a cent from Thursday's close.  Net volume was pretty respectable at 32,000 contracts.

Platinum traded flat until shortly after 11 a.m. Zurich time---and then it, too, got sold down---with the low coming around 12:30 p.m. in New York.  It rallied a few dollars into the close as well but finished the Friday session down $13 at $1,129 spot.

The palladium chart looks like the platinum chart---sort of---and it closed yesterday at $772 spot, down four dollars from Thursday.

The dollar index closed late on Thursday afternoon in New York at 94.81---and traded unchanged until minutes after 2 p.m. Hong Kong time.  It chopped lower until shortly after 10 a.m. in London---and the subsequent rally topped out at 95.40 just minutes before 1p.m. EDT.  It chopped quietly lower in the close.  The index finished the Friday session at 95.21---up 40 basis points on the day---and gaining back the 40 basis points it lost on Thursday.

Here's the 1-year U.S. dollar chart---and as you can see, we've had a bounce off of its extreme oversold condition, so we'll have to see how things develop as next week's trading unfolds.  However there isn't anything from preventing it from becoming even more oversold.

The gold stocks opened lower---and then rallied in a wide range throughout the Friday session.  It flirted with positive territory a few times, but couldn't quite close in the green---and finished down a miniscule 0.04 percent.

The silver equities also opened a hair lower, but bounced into positive territory almost immediately---and stayed in the green [for the most part] for the remainder of the Friday session.  Nick Laird's Intraday Silver Sentiment Index closed up 0.73 percent.

The CME Daily Delivery Report for Day 3 of deliveries into the May contract showed that 1 gold and 143 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The largest short/issuer in silver was Credit Suisse with 91 contracts---and JPMorgan was the largest long/stopper once again with 46 for its client account---and 48 for its in-house (proprietary) trading account.  The other long/stopper of note was HSBC USA with 40 contracts.  The link to yesterday's Issuers and Stoppers Report is here---and it's worth a quick look.

The CME Preliminary Report for the Friday trading session showed that gold open interest in May rose by one contract to 227 contracts---and silver's o.i. fell 479 contracts to 1,248, minus the 143 contracts mentioned above.

I missed a smallish deposit into GLD on Thursday.  That amount totalled 9,593 troy ounces.  And yesterday an authorized participant added a further 76,743 troy ounces.  As of 6:54 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was no sales report from the U.S. Mint yesterday.

For the month of April, the mint sold 29,500 troy ounces of gold eagles---10,000 one-ounce 24K gold buffaloes---and 2,851,500 silver eagles.  Based on these sales, the silver/gold ratio works out to 72 to 1.

Here's Nick's chart showing the dollar value of U.S. gold coins sold vs. the dollar value of U.S. silver eagles---and as you can tell, except for January in each of the last two years, the dollar value of each is pretty much neck and neck.

By the way, I've been corresponding back and forth with the Royal Canadian Mint looking for the fourth quarter report---and their 2014 annual report.  It still isn't available---and won't be until the end of June, at least that's what they told me yesterday.  You have to wonder what's going on that it takes six months to produce these reports, as they should have been out ages ago.

Over at the Comex-approved depositories on Thursday, there wasn't a lot of gold movement, as only 6,748 troy ounces were received---and nothing was shipped out.

In silver, there was 599,440 troy ounces reported received---and 300,049 troy ounces shipped out the door.  The receipt was at Brink's, Inc.---and the withdrawal was from Canada's Scotiabank.  The link to that activity is here.

There was no reported in/out activity at the COMEX-approved gold kilobar depositories in Hong Kong on Thursday.

The Commitment of Traders Report, for positions held at the close of trading on Tuesday, was pretty much as Ted Butler expected, as the headline numbers in gold and silver showed basically unchanged.  But, as Ted pointed out, the changes under the surface in silver were quite weird.  I'll dispense with the gold activity first---and then deal with silver.

In gold, the Commercial net short position increased by only 1,866 contracts, which is about as close to unchanged as you'll ever see, as it's barely a rounding error.  The changes in the Big 4, Big 8---and the raptors, aren't worth mentioning.

Under the hood in the Disaggregated Report, it was slightly different as the Managed Money increased their short position by a further 4,235 contracts.  The unblinking non-technical longs in the Managed Money category went in the other direction, adding 6,693 contract to their already impressive long position.

In silver, it was, as Ted Butler said---"just plain weird."

On the surface in the legacy COT Report, it was basically unchanged as well, as the Commercial net short position increased by a tiny 163 contracts, which isn't even a rounding error.

But here's where it gets strange.  According to the numbers, Ted says that the Big 4 traders added another 2,700 contracts to their short positions---and the '5 through 8' traders increased their short position by 2,800 contracts.  The raptors, the Commercial traders other than the Big 8, went long 5,500 contracts---opposite, of course, what the Big 8 went short.

Why would the Big 8 do that, Ted wants to know.  So do I.  When I asked Ted what JPMorgan's new short-side corner was in the Comex silver market, he was reluctant to assign the 2,700 contracts that the Big 4 went short to JPMorgan.

It doesn't make any sense unless there's been a mistake.  The headline numbers in silver look about right, but the internal structural changes are a big mystery.

Under the hood in the Disaggregated COT Report, the technical funds in the Managed Money category added a whopping 5,441 contracts to their short position---and the unblinking nontechnical funds in the Managed Money category added another 1,798 contracts to their impressive long position.

I look forward to what Ted has to say about it, but as you can tell from above, he has his problems making sense of it all.

One thing is for sure, though---and that's that next week's COT Report will make all things clear---but only if things don't blow up between now and Tuesday's cutoff for next Friday's COT Report and Bank Participation Report.

Since the Tuesday cutoff, of course, the COT structure has improved immensely---and as I said in yesterday's column, we're back to wildly bullish in silver---and may be in gold as well after yesterday's new low tick to the downside.

Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" chart for the Big 4 and Big 8 traders in all physical commodities, updated with the data from yesterday's COT Report.  As a result of the changes in yesterday's COT Report, the short position in silver held by the Big 8 traders has now blown out 165 days of world production, which is in the neigbourhood of 380 million troy ounces.

Nick was also kind enough to send along the weekly withdrawals from the Shanghai Gold Exchange for the week ending April 24.  During that reporting week, they withdrew 50.796 tonnes---and here's his most excellent chart showing that change.

Year to date, there have been 782.231 tonnes reported withdrawn from the Shanghai Gold Exchange, so we're mostly on track (for the moment) to equal or exceed the withdrawals reported in 2014 and 2013.

Here's the cumulative weekly gold withdrawals from the SGE---and it's also courtesy of Nick Laird, so you can put the numbers in the previous paragraph in some sort of perspective.

I've hacked and slashed---and have the number of stories down to a reasonable number.  A fair number I've been saving for today's column for length or content reasons---and I hope you have the time to spend on the ones that interest you the most.


¤ Critical Reads

US Manufacturing Weakest in Two Years as Construction Spending Plunges; Mfg Employment Lowest Since 2009

April's Manufacturing PMI printed a minimally disappointing 54.1 (against 54.2 prior and expectations) - its lowest since January and hardly the post-weather Q2 surge everyone was hoping for. New Orders and Production were the weakest since December and export business fell for the first time in 5 months and input prices dropped for the 4th month in a row; all leading Markit to demand The Fed remain patient.

ISM Manufacturing missed expectations and has not risen for 5 months (its longest streak since the recession) with a contraction in the employment index to lowest since Sept 2009. And then Construction Spending plunged 0.6% (against a +0.5% exp.) - the 7th miss in 10 months and worst April print since 2009.

This chart-filled commentary appeared on the Zero Hedge Web site at 10:11 a.m. EDT on Friday morning---and today's first story is courtesy of reader M.A.


Atlanta Fed Cuts Q2 GDP Forecast to +0.8% After Construction Spending Crunch

Just as we warned earlier, the April data are not suggesting the kind of post-weather Q2 bounce in economic growth that everyone is praying for  (or not if you're long stocks). On the heels of this morning's tumble in construction spending, The Atlanta Fed forecasts second-quarter real nonresidential structures investment to collapse 20%, leading to a mere 0.8% Q2 GDP growth estimate (dramatically below consensus hope expectations of 3.3% growth).

This two-chart commentary appeared on the Zero Hedge Web site at 12:33 p.m.  yesterday afternoon EDT---and I thank Dan Lazicki for sending it along.


US Jobs Relapse Raises Fresh Doubts on Fed Tightening

A key indicator of manufacturing jobs in the US has dropped to its lowest level since the financial crisis as industry remains stuck in the doldrums, dashing hopes for a swift rebound after the economy ground to a halt in the first quarter.

The surprisingly weak data greatly reduce any likelihood the US Federal Reserve will raise rates in June for the first time in eight years, once again putting off the long-feared turning point in the global monetary cycle and perhaps offering another reprieve for dollar debtors across the world.

The closely watched index of the Institute for Supply Management (ISM) remained anaemic in April, confirming fears that the strong US dollar and energy crash in the once-booming shale states are taking a serious toll.

The employment component dropped sharply to 48.3, below the “boom-bust line” of 50 and the lowest in almost six years. The relapse is likely to set off alarm bells at the Fed, where chairman Janet Yellen pays very close attention to the labour market.

This commentary by Ambrose Evans-Pritchard put in an appearance on the Internet site at 7:38 p.m. BST yesterday evening, which was 2:38 p.m. EDT.  I thank Roy Stephens for sliding it into my inbox at 3:18 a.m. EDT this morning.


Gartman Is Bullishly Bearish on Stocks in Confused Terms

Once again proving "you get what you pay for," world-renowned Dennis Gartman unleashes his own brand of indecipherable nonsense advice to stock traders this morning...

If stocks open higher this morning - and please remember that today is a holiday in so many places around the world beginning in Asia and continuing into Europe, although the markets in North America are open for we do not celebrate May Day here in the US or Canada, despite the left-ward lean in recent year in the Administration - we would expect that strength to perhaps hold and perhaps even to increase as the day progresses---and perhaps even more certainly if we were long we’d be using any strength to reduce that size of that long position.

For the next few days and perhaps even for the next few weeks, strength is to be sold into; weakness is not to be bought.

Got it straight now, dear reader?  This is a man who should have done the investing world a favour by putting himself out to pasture years ago.  It's another Zero Hedge piece---and it's the second one of the day from Dan Lazicki.


Doug Noland: Quasi-Capitalism and Crowded Trades

Treasury yields rose this week in the face of unstable equity markets. The dollar was under pressure. Biotech stocks were slammed. Higher-yielding stocks were being sold. So-called “defensive” stocks were underperforming. Small caps were underperforming. Meanwhile, many heavily shorted stocks and sectors were outperforming. Copper surged 6.4%, as an almost 2% gain in the Goldman Sachs Commodities Index boosted 2015 gains to 6.1%. In short, Crowded Trades were causing a bit of angst. I’m not so sure Friday’s equity rally rectified the situation.

Global bond markets have been priced for QE and disinflation forever. This historic Bubble – with all the unknown leverage and unappreciated risks to sophisticated and unsophisticated alike – now confronts a major risk: China.

Chinese officials were too slow and timid in efforts to rein in their runaway Bubble. “Terminal Phase” excesses have been accommodated to the point where massive fiscal and monetary stimulus will surely be forthcoming. This creates major uncertainty for the global pricing backdrop – for commodities, for things and for bonds. And with even signs of life in Europe, there’s now a catalyst for a potential upside surprise in inflation “psychology”. As such, the risk vs. reward calculus for the Crowded global deflation bond trade is turning unattractive. Moreover, Treasuries - and government bonds generally – are losing their appeal as a reliable hedge against market risk.

Government finance has made such a mess of things. Global bonds have become a historic Crowded Trade. Long dollar (short euro, yen, commodity currencies, EM, etc.) is a huge Crowded Trade. If a Chinese move toward massive stimulus (in concert with ultra-loose policies everywhere) does begin to weigh on global bond markets, what might this mean for the currencies Crowd? How vulnerable is the dollar to a self-reinforcing decline, the mirror image of the king dollar melt-up. What would this mean to the Crowded commodities short trade? Commodities and commodity currencies have been trading more bullishly.

Doug's weekly Credit Bubble Bulletin is always worth reading---and I thank reader U.D. for bringing it to our attention.


G. Edward Griffin Revisits "The Creature From Jekyll Island" After 20 years

This 22:41-minute audio interview with Ed appeared on the Internet site on Tuesday---and for length reasons had to wait for today's column.

It's in MP3 format---and it takes a few seconds for it to load up, even on a faster computer, so be patient, because it's worth your while if you have the time.  I thank Dennis Meridith for bringing it to our attention.


Jon Stewart Tears into ex-NY Times Reporter Judith Miller over Iraq Reporting

Former New York Times journalist Judith Miller found herself in the hot seat on “The Daily Show” as Jon Stewart ripped apart her reporting of Iraq’s alleged weapons of mass destruction, a narrative that would help fuel momentum for war.

“I believe that you helped the administration take us to the most devastating mistake in foreign policy that we’ve made in, like, 100 years,” Stewart said Wednesday evening, adding, “but you seem lovely.”

Stewart fired back during the heated back-and-forth exchange:

“I think it was a concerted effort to take us into war in Iraq. You had to shift, with energy, the focus of America from Afghanistan and al Qaeda to Iraq. That took effort. Somebody pointed the light at Iraq, and that somebody is the White House, and the Defense Department, and Rumsfeld. He said right after 9/11, ‘Find me a pretext to go to war with Iraq.’ That’s from the 9/11 papers and the study.”

When asked whether she felt she had been manipulated, Miller responded, “all journalists are manipulated and all politicians lie.”

This item appeared on the Internet site at 3:10 p.m. EST on Thursday afternoon---and unfortunately the two embedded Jon Stewart videos won't be watchable outside the USA, but you'll get the drift from the text, as Jon carves Judith and the NYT a new one.  It's the first offering of the day from Roy Stephens.


The 100th Anniversary of a False Flag at Sea: The Sinking of the Lusitania

This is a long article. But World War I – which was the first global war, and claimed as many as 65 million lives – has nearly been forgotten about. This article contains many suppressed facts, and I hope you come away from it with a better understanding of how the present connects to the past.

As discussions crop up of a Third World War possibly arising from tensions in the Middle East or Ukraine, it is apt to examine the First World War, whose 100th anniversary falls this year. America’s entanglement in that war, like so many others, was engineered through a false flag.

In 1915, Britain was at war with Germany. The United States was still neutral. On May 7, the Lusitania, a British ocean liner en route from America to England, was sunk by a German submarine some 12 miles off Ireland’s southern coast. There were 764 survivors, but nearly 1,200 people, including 128 Americans, lost their lives. The Lusitania – which had been the world’s largest ship when launched in 1906 – went down in just 18 minutes after a single torpedo hit. Survivors reported there had been two explosions – a smaller one followed moments later by an enormous one. This was affirmed by the log of the U-20, the submarine which sank her.

The tragedy was portrayed to the public as the wanton slaughter of women and children. It became the subject of a relentless propaganda campaign, including a fabricated claim that German children were given a holiday from school to celebrate the sinking. The Lusitania was the most important in a series of pretexts used to generate the eventual U.S. declaration of war on Germany.

There isn't a thing in here that surprises me, as I read the Reader's Digest version of these events in G. Edward Griffin's book "The Creature From Jekyll Island".  It's a long read, but it's an absolute must read---and probably the most important non-gold story in today's column, even though it happened a century ago.  If you don't know the true story, you'll be shocked by what you read here.  It was written by author James Perloff---and my thanks go out to him for bringing it to my attention, and now to yours.


How Margaret Thatcher and Robert Murdoch Made Their Secret Deal

In 1981, Mrs Thatcher needed a boost from the press. By supporting Rupert Murdoch’s bid for the Times and Sunday Times, she made sure she got it. Harold Evans, who led an unsuccessful staff takeover bid, reveals a historic carve-up.

The coup that transformed the relationship between British politics and journalism began at a quiet Sunday lunch at Chequers, the official country retreat of the prime minister, Margaret Thatcher. She was trailing in the polls, caught in a recession she had inherited, eager for an assured cheerleader at a difficult time. Her guest had an agenda too. He was Rupert Murdoch, eager to secure her help in acquiring control of nearly 40% of the British press.

Both parties got what they wanted.

The fact that they met at all on 4 January 1981 was vehemently denied for 30 years. Since their lie was revealed, it has been possible to uncover how the greatest extension of monopoly power in modern press history was planned and executed with such furtive brilliance.

This essay was posted on The Guardian Web site on Tuesday---and had to wait for today's column as well.  They call it "The Long Read"---and that, dear reader, is precisely what it is---although it's certainly not as long as the story about the Lusitania.  If you have the interest, it's worth reading.  I thank reader Jon Wallace for sharing it with us.


Weaponizing Information: Cranking Up the Rhetoric

In mid-April, hundreds of U.S. paratroopers from the 173rd Airborne Brigade arrived in western Ukraine to provide training for government troops. The U.K. had already started its troop-training mission there, sending 75 troops to Kiev in March.  On April 14, the Canadian government announced that Canada will send 200 soldiers to Kiev, contributing to a military build-up on Russia’s doorstep while a fragile truce is in place in eastern Ukraine.

The Russian Embassy in Ottawa called the decision “counterproductive and deplorable,” stating that the foreign ministers of France, Germany, Russia and Ukraine have “called for enhanced intra-Ukrainian political dialogue,” as agreed upon in the Minsk-2 accords in February, and that it would be “much more reasonable to concentrate on diplomacy…”

That viewpoint is shared by many, especially in Europe where few are eager for a “hot” war in the region. Nor are most people enamoured of the fact that more billions are being spent on a new arms-race, while “austerity” is preached by the 1 Per Cent.

But in the Anglo-American corridors of power (also called the Atlantic Alliance), such views are seen to be the result of diabolical propaganda spread through the Internet by Russia’s “secret army.” On April 15, the U.S. House Foreign Affairs Committee, chaired by Ed Royce, held a hearing entitled “Confronting Russia’s Weaponization of Information,” with Royce claiming that Russian propaganda threatens “to destabilize NATO members, impacting our security commitments.”

Here's another rather longish essay.  It's an interesting commentary---and it appeared on the Internet site back on April 23---and it's another story that had to wait for my Saturday column.


Is Merkel a CIA Asset?

The claims that Merkel’s government knew about German state intelligence spying on behalf of the Americans against the country’s own industrial interests raise disturbing questions about the integrity of German government leaders.

The apparent betrayal of German national interests by Chancellor Angela Merkel is not only evident over the recent industrial spying scandal on behalf of America, the slavish pursuit by Merkel of Washington’s anti-Russian policy over Ukraine — in contradistinction to her country’s national interests — also cogently suggests that the chancellor is serving a foreign master.

Recent reports that German state intelligence was spying on behalf of the Americans against the country’s own industrial interests are bad enough, but then added to that are claims that the government of Chancellor Angela Merkel knew about the espionage — and turned a blind eye.

I've always wondered about Merkel myself---and the more time that passes, the more I wonder about her---and that's the reason why I'm posting this article that appeared on the Internet site yesterday.  I thank Roy Stephens for sending it.


Greek Pensioners Crash Pension Fund Board Meeting, Form Lines at Bank

On Thursday we noted that no matter how tempting it may be to tune out the almost hourly warnings from various sources claiming Greece is finally set to run out of cash, one can’t just assume the government will yet again find another couch cushion to reach into in order to scrape up a few more euros to pay government employees and creditors and thereby forestall the inevitable for another few weeks. Eventually, there simply will be no more money and the first signs that Greece has entered the final, terminal phase in the long and painful road to complete insolvency showed up last month in the form of a sweeping decree which required municipalities to transfer excess cash to the central bank. 

That mandate was greeted with incredulity and with the country’s local governments less than willing to turn over their funds, Athens finally ran out of money (if only for 8 or so hours) on Tuesday when pensioners showed up at ATMs only to discover that their money simply was not there. Amusingly, the government blamed the delay on a “technical glitch”, and while we suppose it’s not exactly a lie to call running out of money a “technical glitch”, it was abundantly clear that the country’s socialist saviors were making a feeble attempt to avert a pensioner mutiny. Today, we get more details about the situation and sure enough, the retirees are restless.

This news item is from the Zero Hedge Internet site once again.  It put in an appearance there at 8:25 a.m. EDT yesterday---and I thank reader 'David in California' for passing it around.


John Batchelor Interviews Stephen F. Cohen About the Ukraine

With the Ukraine Civil War in a semi-holding pattern with Minsk2 more or less intact, Batchelor and Cohen step back from the details of the conflict to discuss the geopolitical aspects of the major players in regards to the principles of the Westphalian Sovereignty of International Law. This is defined in International Law where every nation has a basic right of sovereignty of its borders and internal policies against outside interference by other nations.  Russia is accused of abusing this aspect of International Law by the major players in the West because of its “support” of the Donbass rebels, and, of course, there are western troops present on the Kiev side “advising and training” Ukrainian army units – and others. The West warns that this is preparation for a larger war, and Russia “responds that this talk is simply means Kiev is going to attack the Donbass again. They are probably correct - so far.

Specifically the West is accusing Putin of destroying the post Soviet Order by its annexing of the Crimea Peninsula and arming the fighters in the East – ignoring, however, Washington's history of trespass globally and regionally (Serbia), and also ignoring Russia’s appeal to involve itself in the security of Europe while NATO proceeded to encroach on Russia. This is clearly a double standard. And the transformations in Europe, Russia, and China over the destabilizations of Ukraine are huge historical geopolitical changes.

Cohen goes on to explain what Moscow’s goals are in the Ukraine. It ONLY wants peace and trade with the world while it rebuilds from the Soviet Union failure. However, Cohen maintains that Russia legitimately needs a zone of security (as does the USA in the West), and a hostile and bankrupted Ukraine does not meet this criteria. NATO is, however, moving east and for Russia, from a security point of view, this is becoming intolerable. Therefore Russia has its “red line” in this regard; we should hope that the West is paying attention.  Russia is pushing back now.

This 39:45-minute audio interview was posted on the Internet site on Tuesday sometime---and it's another item that had to wait for my Saturday column.  I thank Larry Galearis for finding it for us.


House Committee Approves $200 Million for Arming Ukraine

Citing an anti-Russia policy brief, US lawmakers approved $200 million for providing “lethal weapons of a defensive nature” to the Ukrainian government as part of the $600 billion Pentagon budget proposal for the fiscal year 2016.

The House Armed Services Committee passed its proposal for the 2016 National Defense Authorization Act (NDAA) with a bipartisan vote of 60 to 2, in what Defense News described as a “marathon” session that ended around 4:30am on Thursday.

Section 1532 of the 498-page document calls for the US to provide assistance, “including training, equipment, lethal weapons of a defensive nature, logistics support, supplies and services, and sustainment to the military and national security forces of Ukraine” through the end of September 2016.

This story was posted on the Russia Today Web site at 2:47 a.m. Moscow time on their Friday morning, which was 7:47 p.m. EDT in Washington on their Thursday evening.  I thank Jim Skinner for that article.  There was a follow-up story to this headlined " Russia warns U.S. against supplying ‘lethal defensive aid’ to Ukraine"---and I found it in the right sidebar of the first RT story.


Return of the Crimea to Russia Was Inevitable: Jimmy Carter

Former US President Jimmy Carter, in an interview with radio station Voice of America, said that the reunification of Russia and the Crimea was an inevitable event.

Carter also says he is pleased with Russia's commitment to implement the Minsk agreement.  He added that the Elders were also pleased with Russia's allegiance to the Minsk agreement.  “There's not any doubt in our mind that the Russians genuinely want to see all the aspects of that concluded.  I think that's the only ballgame in town,” said Carter, “really as far as resolving the problems with Ukraine, is to get the Minsk agreement implemented.”

Carter and other former global leaders met with Russian President Vladimir Putin for 2.5 hours Wednesday in Moscow.  The group, called the Elders, visited at a time when Russia's relations with the West are severely strained over Moscow's seizure of Crimea and the deadly conflict in eastern Ukraine.

This news item showed up on the Internet site yesterday sometime---and it's another offering from Roy Stephens.


Pepe Escobar: Why NATO Is Terrified of Russia

The twin-pronged attack – oil price war/raid on the ruble – aimed at destroying the Russian economy and place it into a form of Western natural resource vassalage has failed.

Natural resources were also essentially the reason for reducing Iran to a Western vassalage. That never had anything to do with Tehran developing a nuclear weapon, which was banned by both the leader of the Islamic revolution, Ayatollah Khomeini, and Supreme Leader Ayatollah Khamenei.

The ‘New Great Game’ in Eurasia was always about control of the Eurasian land mass. Minor setbacks to the American elite project do not mean the game will be restricted to a mere “war of attrition”. Rather the contrary.

In Ukraine, the Kremlin has been more than explicit there are two definitive red lines. Ukraine won’t join NATO. And Moscow won’t allow the popular republics of Donetsk and Lugansk to be crushed.

This very worthwhile commentary by Pepe was posted on the Russia Today Web site at 6:07 a.m. Moscow time on May 1---and I thank South African reader B.V. for sending it our way.


Pepe Escobar: Why the US “War on Terra” Is a Fraud

A new scathing report by the Nobel prize-winning Physicians for Social Responsibility has revealed that more than 1.3 million people were killed only during the first ten years of the Global War on Terror (GWOT) in Iraq, Afghanistan and Pakistan alone. What was formerly known as GWOT — or, in Dubya-speak, “war on terra” — was Orwellianized by the Obama administration into “Overseas Contingency Operations” (OCO).

Crucially, the report does not even cover OCO’s trail in Libya, Syria, Somalia and Yemen (one war “won” by NATO/AFRICOM; one ongoing civil war; and two targets of Obama’s nefarious “kill list”.) Moreover, the figures on AfPak and Iraq are far from being the latest. And the total estimate of lethal casualties is considered “conservative”.

The record shows that this OCO killing machine ran amok for almost 15 years against whole swathes of the planet — not to mention burning trillions of dollars in U.S. taxpayer funds — and had absolutely zero effect in containing terrorism. Rather the contrary; Asia Times readers are aware of how I’ve defined GWOT as the gift that keeps on giving.

And it all started way before 9/11 — and the official Dubya enshrinement of GWOT.

This commentary by Pepe was posted on the Asia Times Web site on Thursday---and the stories from Roy Stephens just keep on coming.


Pepe Escobar: The Pentagon's "Long War" Pits NATO Against China, Russia, and Iran

Whatever happens with the nuclear negotiations this summer, and as much as Tehran wants cooperation and not confrontation, Iran is bound to remain — alongside Russia — a key U.S. geostrategic target.

As much as US President Barack Obama tried to dismiss it, the Russian sale of the S-300 missile system to Iran is a monumental game-changer. Even with the added gambit of the Iranian military assuring the made in Iran Bavar 373 may be even more efficient than the S-300.

This explains why Jane's Defense Weekly was already saying years ago that Israel could not penetrate Iranian airspace even if it managed to get there. And after the S-300s Iran inevitably will be offered the even more sophisticated S-400s, which are to be delivered to China as well.

The unspoken secret behind these game-changing proceedings actually terrifies Washington warmongers; it spells out a further front line of Eurasian integration, in the form of an evolving Eurasian missile shield deployed against Pentagon/NATO ballistic plans.

This is the third commentary in a row from Pepe.  This one appeared on the Internet site on Tuesday afternoon Moscow time---and another story that had to wait for today's column.  My thanks go out to Roy Stephens once again.  I haven't had the time to read this or the previous commentary by Pepe, but it's on my "to do" list for this weekend.


Robert Fisk in Abu Dhabi: The Acceptable Face of the Emirates

While Dubai is a byword for excess, vulgarity and human rights abuses, the UAE's capital affects a higher calling. So, alongside the Emirates Palace Hotel (1,022 crystal chandeliers), the Grand Mosque (capacity: 40,000) and four million foreign workers, there are galleries, museums, seats of learning – and the stated aim of being a 'role model' for its neighbours. Has Abu Dhabi found a way to blend petrodollars with principles?

The Abu Dhabi Louvre looks like the top of a giant, primordial eggshell pushing its way out of the sand. Its giant dome already glisters under the sun, its construction workers moving like spiders over five layers of cladding, steel and aluminium which will give this extraordinary museum a combined weight of 7,000 tons, just a little less than the Eiffel Tower. Already the concrete base of a man-made lake spreads around the construction, for architect Jean Nouvel's Louvre will be on a miniature island, its works of art transported to its gallery through an underground tunnel, light sprinkled into its interior as if through the fronds of palm trees.

Very romantic. Very French orientalist, I say to myself. Very Arab too, perhaps. The idea is that art will move chronologically through centuries inside the new Louvre, oriental and Western paintings next to each other.

But won't Abu Dhabi have a few problems with nudes, with Gauguin or Picasso or Poussin? No, says my companion, as he explains the double insulation and the cladding which will, we all hope, prevent water spewing on to the Louvre's greatest masterpieces. "All that is accepted. This is art. This is for education." Contemporary art will be inside the Abu Dhabi Guggenheim a few hundred yards away, still just a sand-pile of dumper trucks and bobbing labourers' hats.

This very interesting inside look at the UAE showed up on the Internet site on Wednesday---and for content reasons, had to wait for Saturday's column.  I thank reader B.V. for his second contribution of the day.


Glenn Greenwald: Cowardly Firing of Australian State-Funded TV Journalist Highlights the West’s Real Religion

A TV sports commentator in Australia, Scott McIntyre, was summarily fired on Sunday by his public broadcasting employer, Special Broadcasting Services (SBS), due to a series of tweets he posted about the violence committed historically by the Australian military. McIntyre published his tweets on “Anzac Day,” a national holiday — similar to Memorial Day in the U.S. — which the Australian government hails as “one of Australia’s most important national occasions. It marks the anniversary of the first major military action fought by Australian and New Zealand forces during the First World War.”

Rather than dutifully waving the flag and singing mindless paeans to The Troops and The Glories of War, McIntyre took the opportunity on Anzac Day to do what a journalist should do: present uncomfortable facts, question orthodoxies, highlight oft-suppressed views.

Well, dear reader, anyone who has read David Fromkin's classic tome A Peace to End All Peace: The Fall of the Ottoman Empire and the Creation of the Modern Middle East will certainly support the views of Scott McIntyre.  This news item appeared on the Internet site on Thursday---and my thanks go out to Roy Stephens for passing it along yesterday.  It's definitely worth reading.


Sprott Money Weekly Wrap-Up

Listen to Eric Sprott share his thoughts on stagnant economic numbers, Greek banks and pensioners, continual spoofing with no proper policing, and the movement of physical gold this week.

This interview with Eric was conducted by Sprott Money's Geoff Rutherford---and it was posted on the Internet site yesterday.


Finding the "Lost" 1913 $3-Million Nickel

Heartland Precious Metals President Paul Montgomery on the discovery of a 1913 ‘lost’ nickel worth $3 million.

This very interesting 3:35-minute video clip showed up on the Internet site yesterday---and it's another offering from Dan Lazicki.


Gold Manipulators Busted After Zero Hedge Report on Flagrant Gold Spoofing

In the aftermath of the Nav Sarao scapegoating farce, one week ago Zero Hedge decided to give the confused CFTC a helping hand and launched a daily series highlighting the constant spoofing and "manipulation" (in the CFTC and DOJ's own words) that takes place in every asset class, but mostly in the E-mini futures. Virtually every day since then we presented the "regulators" at the commodity trading commission a clear example of stock market manipulation, with the exception of Tuesday, when with the exclusive help of Nanex, we showed a clear case of gold spoofing.

Much to our dismay, overnight we learned that while the CFTC continues to be very, very confused and challenged by all those lobby payments by the world's "liquidity providing" HFTs and ignores all documented evidence of manipulation, the Chicago Mercantile Exchange - owner of the futures exchange where the bulk of modern manipulation takes place - did read this evidence of manipulation, and decided to immediately take action, suspending two traders for placing the manipulative "spoofing and layering" trades profiled here three days ago which were virtually identical to the ones that got Navinder Singh Sarao into headlines around the world last week. Except, of course, the asset class manipulated was gold. And, perhaps what's far worse, the manipulation sent the price of gold briefly higher.

The names of the perpetrators: perhaps not surprisingly, Heet Khara and Nasim Salim. Extend to Navinder Sarao and a pattern emerges...

This is the Zero Hedge spin on a story that appeared in my column very early on Friday morning.  Their story showed up at 10:27 p.m. EDT yesterday evening---and it's worth reading.  The first person through the door with this story was reader M.A. who sent it to me at 10:27 a.m. EDT yesterday morning, so it's obviously been edited since it was first posted yesterday morning.


These Three Developments Say New Mine Supply Is Peaking

Our curiosity was piqued as we reviewed the year-end reports of the primary gold producers. When we tallied the results, even we were surprised.

The upshot of what you’ll see is that at its current pace, new supply will be unable to keep up with demand. It may look like a story that doesn’t have much immediate impact, but this emerging new reality is staring us right in the face.

Specifically, there are three developments underway that paint an ominous picture for new gold supply…

Most of what's in here isn't new news, as a higher gold price will change a lot of things.  But, having said that, it's still very much worth reading, as we're definitely past "Peak Gold" no matter what the price is now, or in the futureBIG GOLD editor Jeff Clark posted this on the Casey Research Web site yesterday.


Positives and Negatives in CPM Silver Report -- Lawrence Williams

We have already seen the major specialist consultancies’ reports on the gold sector in 2014 with price predictions for the current year and beyond – indeed one of these, GFMS, has already issued a Q1 update See: GFMS Q1 update confirms China as world No. 1 gold consumer  and now it is the turn for silver with the U.S. CPM Group putting out its 230 page 2015 Silver Yearbook with its wealth of  data on last year’s global supply and demand and some thoughts on how the silver price will perform  this year.

Given that silver appears to be inextricably linked to gold as an investment, despite the prime demand for it as an industrial metal rather than a monetary one, it is hardly surprising that CPM views the path of the silver price this year as being somewhat similar to its predictions for gold See: Further downside on gold prices limited – CPM .  Thus it sees some weakness in the months ahead, but with the silver price consolidating later in the year.  However silver is more volatile than gold so we could see larger percentage falls on the downside, but a bigger rise once a recovery does begin to set in.

The report does take a little time to discuss the relevance of the Gold:Silver ratio and concludes that reliance on this is not particularly valuable.  The so-called historic 16:1 ratio, set by Isaac Newton in the early 1700s when silver was very much a monetary metal alongside gold may no longer be of any import, although some investors do believe that it should be.  CPM sees no scientific or quantitatively supportable basis for such a belief that the 16:1, or any other specific ratio, should be of particular relevance, although it recognises that there are many who believe strongly that they should.  But with the ratio varying from around 17 to 97 over the past few decades this would seem to make it a poor indicator of what prices for the two metals should be.

Of course, dear reader, nowhere in this report, or any other CPM report on silver, is there a word about the big short-side corners in the Comex futures market in silver that are held by JPMorgan and Canada's Scotiabank, or the other six short holders that make up the 'Big 8' shown in Nick Laird's chart further up.  Nor is there anything about JPMorgan's huge stockpile of Comex silver good delivery bars, U.S. silver eagles, or Canadian silver maple leafs.  As I said about GFMS and the World Gold Council yesterday, you can hardly believe a word they say---and CPM Group falls into that category as well.  So when measured against that, this report is mostly smoke, mirrors, and bulls hit.  However, having said all that, there is some useful information in here---and since Lawrie put a lot of writing effort into picking up this turd by its clean end, please do him a favour and read it.  It's the final offering of the day from Roy Stephens---and I thank him on your behalf.


What Happens When You Hand Over Your Gold to the BIS and Bank of England for "Safekeeping"

When Nazi Germany annexed the Czechoslovak border province of the Sudetenland in September 1938, it immediately absorbed a good part of the country’s banking system as well as most of Czechoslovakia’s strategic defenses. By then the country’s national bank had prudently transferred most of its gold abroad to two accounts at the Bank of England: one in the name of the BIS, and one in the name of the National Bank of Czechoslovakia itself. (Countries had deposited some of their gold reserves in a sub-account at the BIS account in London to ease gold sales and purchases.) Of the 94,772 kilograms of gold, only 6,337 kilograms remained in Prague. The security of the national gold was more than a monetary issue. The Czechoslovak reserves, like those of Republican Spain, were an expression of nationhood. Carved out of the remains of the Austro-Hungarian Empire in 1918, the Czechoslovak Republic was a new and fragile nation. A good part of the gold had been donated by the public in the country’s early years.

Josef Malik, the governor of the national bank, and his fellow Czechs believed that, even as the Nazis dismembered their homeland, if the national gold was safe, then something of the country’s independence would endure.

They were wrong. The Czechoslovaks’ faith in the probity of the BIS and the Bank of England was tragically misplaced. The gold was sacrificed, with barely a second thought, to the needs of transnational finance and the Third Reich.

The Nazis’ first demand came in February 1939 when Berlin ordered Prague to transfer just over 14.5 metric tons of gold, supposedly to back the German currency now circulating in the Sudetenland. This was certainly an innovative idea— first invade a neighboring country, annex part of it, and then demand that the newly truncated state supply the gold to pay for the loss of its territory.

This absolute must-read essay appeared on the Zero Hedge website at 3:49 p.m. Friday afternoon EDT---and is an excerpt from the book TOWER OF BASEL: The Shadowy History of the Secret Bank that Runs the World by Adam LeBorIt's right up there with that absolute must-read story about the Lusitania posted further up---and if you didn't read it, it's not too late to make amends.  Dan Lazicki was the first reader through the door with this---and I thank him.



¤ The Funnies

Some people don't like seagulls, but as a photographer I don't belong in that group.  They're a study in aerodynamics that's only exceeded by the albatross.  They are a pain to take a picture of when using a long lens close up, as they're always moving, plus they fill the field of view and therefore are difficult to track---and with depth of field issues at closer distances, I probably only keep one out of every ten I take.  But depth of field is a blessing at times, as in the first two photos of ring-billed gulls below, the distant background of willow bushes vanishes---and the bird stands out in all its glory.  The third and fourth photos show the grass in the foreground in sharp focus, but the further into the background you look, the less you can make out---and this makes the subject material, whatever it is, just pop right out of the photo.  This is not due to the genius of the photographer, but is a characteristic of the lens being used.  Don't forget the "click to enlarge" feature, as it works wonders on the photos as well as the charts.

Avnel Gold (TSX:AVK) is a gold mining, exploration, and development company with operations in south-western Mali. The Company’s focus is to develop its 80%-owned Kalana Main Project into a low-cost, open-pit mining operation.

In Q1-2014, the Company reported the results of a PEA based upon a Mineable Resource of 1.58 million ounces at a diluted grade of 3.1 g/t. The PEA outlines a 14-year mine life recovering 1.46 million ounces at an average “AISC” of $577/oz with a capex of $149 million. At $1,110/oz and a 10% discount rate, the NPV was $194 million after-tax and imputed interest with an IRR of 53% on a 100% project basis. Similarly, at a 5% discount rate and at $1,300/oz, the NPV was $424 million with an IRR of 74%. Since the PEA, the open-pit diluted Indicated Resource has increased to 2.2 million ounces at a diluted grade of 3.06 g/t.
Avnel plans to complete its fully funded 141-hole, 23,500-metre drill program in mid-2015, which is expected to provide for a steady flow of news over the coming months. This drilling will form the basis for an updated Resource Estimate in Q3-2015 and DFS that is scheduled to be completed in Q1-2016. Please contact Jeremy Link with questions or for more information.


¤ The Wrap

As I think I’ve opined previously, in considering all that has transpired over the past 30 years, it does not appear possible that JPMorgan or any other entity could have ever established as large a long COMEX silver futures position as the bank has acquired in actual metal. And I say this fully recognizing that I discovered that JPM did hold 85,000 long COMEX gold futures contracts in the late summer of 2013 (after holding 75,000 short gold contracts at the start of that year). In other words, there’s no way in this world that any one entity could ever acquire the 70,000 net long COMEX silver futures contracts that 350 million oz would represent. For one thing, it would stand out like a sore thumb, even for a comatose regulator. For another, there is nowhere near enough counterparty short capacity in COMEX silver futures to allow for any entity to get long 70,000 silver contracts.

What I didn’t begin to contemplate 30 years ago was that any entity could possibly accumulate 350 million oz of actual silver. After all, 35 years ago the silver world was turned upside down by the acquisition of 100 million oz by the Hunt Brothers. But now in hindsight and based upon the continuing flow of the evidence, it appears JPMorgan pulled off the impossible, only in a different manner and with much larger quantities than I ever imagined. Instead of trying to get long COMEX future contracts (which I claim would have been impossible), JPM took my longstanding advice and bought physical silver (and didn’t even sign up as a subscriber – talk about ingratitude).

I can’t prove in advance that JPMorgan won’t use its accumulated physical silver position to continue to manipulate the price, but it’s hard for me to believe they would waste the opportunity for perhaps the biggest financial score in history, and for what –the dubious accomplishment of keeping a metal considered insignificant by the world’s financial community at an artificial low price?  If someone wants to advance that gold might be kept in check because it is an important monetary asset owned by most of the world’s central banks, that doesn’t seem unreasonable. But silver isn’t owned by any world government entity so that puts it in a different league altogether. - Silver analyst Ted Butler: 29 April 2015

Today's pop 'blast from the past' is another one hit wonder, but what a hit it was.  Here's Henry Gross from 1976.  I've posted it before, but it's been many a moon since I did, so here it is again.  Believe it or not, it's a song written about the death of Beach Boy Carl Wilson's Irish setter of the same name.  The link is here.

Today's classical 'blast from the past' is on the longish side, but in the piano concerto genre, it's certainly in the Top 5 for me.  I heard part of it on CBC FM when I was driving to work earlier this week.  It's Brahms' 4-movement Piano Concerto No. 2 in B Flat major, Op. 83 that he completed in 1881 after working on it for three years or so.  The premiere of the concerto was given in Budapest on November 9 of that year with Brahms as soloist, and was an immediate success.  Here's the Munich Philharmonic with Sergiu Celibidache conducting---and on the keyboard is the incomparable Daniel Barenboim.  The link is here.

With gold making a new low for this three-day move down on Friday, there's no doubt that there was further improvement in the Commercial net short position in that metal.  Silver didn't make a new low---and no moving averages were broken, so the trading activity we did have wouldn't have much effect on the COT Report, because the Managed Money doesn't do anything until moving averages are broken either up or down---and those only occur when JPMorgan et al. make it so.

Here are the six-month charts for all four precious metals, plus WTIC, as it continues to rally while the precious metals are being kept in check.

Well, if JPMorgan thought it could keep its silver accumulation activities secret, those hopes got totally blown out of the water during the last week, as the story has popped up on at least half a dozen Internet sites that I've seen, including the big Web sites at, Sharps Pixley---and now Zero Hedge.  When Ted Butler's efforts get picked up by the likes of them, Jamie and the boyz at JPM must know that their silver price management scheme is on its last legs.  That applies to the other three precious metals as well---and all commodity prices in general.

The only thing that's not known is the timing---and the sequence of events as we cross that particular event horizon.  I do get the sneaking suspicion that whatever new precious metals prices rise out of the ashes, they won't be free-market prices, but they will be astronomically higher than they are now.

I'm still somewhat taken aback by the outrageous pounding that the precious metals took at the hands of JPMorgan and their HFT buddies on Thursday.  You would think that some of the precious metal miners, or maybe the World Gold Council or Silver Institute, would make either a statement or have a question or two.  But the thought of calling the CME Group to task on this is obviously not on their "to do" list.

This in-your-face move smacks of a certain amount of desperation, as "da boyz" were determined to take back all the COT deterioration of Monday and Tuesday, along with part of Wednesday---and they did it in less than 48 hours.

So we now await developments, as the next move is up to them.  There's not much downside price movement left in either gold or silver, but they may give it the old college try on Sunday evening, or in early trading in the Far East.  But once they've pulled that last rabbit out of the hat, if there in fact is one, then we'll be back to "locked and loaded" for another rally---and it only remains to be seen if they'll step in front of that one like they did on Monday and Tuesday just past.

Here's hoping they'll put their hands in their pockets this time.

I'm done for the day---and the week.

See you on Tuesday.

Ed Steer