Casey Research Publication
"They're about as subtle as a brick through a plate glass window"
 

¤ Yesterday In Gold & Silver

The gold price didn't do much in Far East trading on their Friday---and was up a couple of bucks by the London open.  Shortly after that, the gold price spiked about five dollars or so, but "da boyz" were there to make sure that things didn't get too far out of hand.  The price chopped sideways from there, but at precisely 8:30 a.m. EDT, the HFT boyz and their algorithms showed up---and thirty minutes later it was all over except for the crying.  Any of the smallish rally attempts after the 9:00 a.m. low were capped.

The high and low ticks were reported by the CME Group as $1,214.60 and $1,201.00 in the June contract.

Gold closed in New York yesterday afternoon at $1,205.90 spot, down 90 cents from Thursday.  Net volume was very much on the lighter side once again at 92,000 contracts.  Gold did not make a new low for this move down, but the Managed Money probably had to puke up all the longs they put on just before the London open earlier in the day.

Here's the New York Spot Gold [Bid] chart so you can see the precision of the timing of the HFT spoofing at both 8:30 and 9:00 a.m. EDT.

The silver price action was a carbon copy of the gold action, right down to the hits at precisely 8:30 and 9:00 a.m. EDT, so I shall dispense with the details.

The high and low were recorded as $17.335 and $16.94 in the July contract.

Silver finished the Friday session at $17.075 spot, down 5.5 cents from Thursday.  Net volume wasn't overly heavy at 28,000 contracts.

Platinum hit its Friday high early in the Zurich lunch hour---and by 9 a.m. in New York was down $17 from that high---and it only recovered a few dollars from there, closing at $1,146 spot, down 7 bucks on the day.

Palladium traded pretty flat until shortly after 10 a.m. in Zurich, but down it went as well---and its low was in by about 8:30 a.m. EDT.  It rallied a decent amount from there---and was into positive territory in afternoon trading in New York, but some kind soul made sure that it closed unchanged at $779 spot.

The dollar index closed late on Thursday afternoon in New York at 95.40---and began to head south almost the moment that trading began in the Far East on their Friday morning.  The 94.82 low tick came minutes after 11 a.m. in London---and by the 8:20 a.m. EDT COMEX open, it had crawled back just above the 95.00 level.  At that point someone hit the "buy the USD/sell precious metals" button---and in less than 70 minutes the index was at 96.22---and from there it chopped more or less sideways, but took a bit of a header in the last ten minutes of trading, finishing the day at 96.01---up just about 62 basis points.

Here's the 6-month U.S. dollar index chart so you can see the manufactured rally that the powers-that-be laid on us yesterday.

The gold stocks opened down a bit, but manged to poke their nose into positive territory for a brief moment between 10:30 and 11:00 a.m. EDT on a smallish rally in gold that was going on at the time.  But once that rally was capped, the stocks rolled over as well---and back into negative territory to stay.  The HUI closed down 0.87 percent.

It was more or less that same for the silver equities, except Nick Laird's Intraday Silver Sentiment Index closed down 1.05 percent.

Nick Laird said that the HUI was down 5.51 percent for the week---and his Intraday Silver Sentiment Index closed lower by 3.52 percent.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

The CME Preliminary Report for the Friday trading session showed that gold open interest in May fell by 6 contracts and is now down to 76 contract still open.  May silver o.i. dropped by 35 contracts, leaving 254 still to go.

I'm not sure if anything is open in the U.S. on Memorial Day or not.  If they aren't, it means that all these deliveries have to be done by Thursday at the latest, as Friday is first notice day for the June delivery month---so they've got exactly one business day left to get this all done.  Tuesday's Daily Delivery Report could prove interesting.

There were no reported changes in GLD yesterday---and as of 8:00 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was a tiny sales report from the U.S. Mint on Friday.  They sold 500 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes.

Month-to-date the mint has sold 15,000 troy ounces of gold eagles---7,000 one-ounce 24K gold buffaloes---and 1,648,500 silver eagles.  Based on these sales numbers the silver/gold ratio works out to 75 to 1.

It was another quiet day for gold over at the COMEX-approved depositories on Thursday.  Only 3,000 troy ounces were received---and nothing was shipped out.  It was ultra-quiet in silver as well.  Only 3,078 troy ounces were received---and 1,006 troy ounces were reported shipped out.

It was reasonably busy at the COMEX-approved gold kilo depositories in Hong Kong on their Thursday.  They reported receiving 4,250 kilobars---and 4,200 kilobars were shipped out.  All of the activity was at Brink's, Inc.  The link to that activity [in troy ounces] is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, was even more ugly than I imagined it could possibly be.  It was, as Ted Butler said in our phone call yesterday, "depressing."

Let me set the stage in gold.  During the the reporting week, we had four 'up' days---and one 'down' day, which was last Tuesday, the cut-off for yesterday's COT Report.  During the four 'up' days, gold gained, at best, $30-odd dollars---and gave up a hair over half of that on the one 'down' day.

During that reporting week, the Commercial net short position in gold blew out by an eye-watering 54,832 COMEX contracts, which is 5.48 million troy ounces of gold, which is the biggest 1-week increase in history.  The Commercial net short position now stands at 13.23 million troy ounces---a 70 percent increase in one week---and for what reason?  To bury a $30+ rally.  These guys are brutal.

The 'Big 4' traders added 17,700 contracts to their short position---and the '5 through 8' went short an additional 13,400 short contracts.  The other Commercial traders, Ted Butler's raptors, sold 23,700 long contracts.  It was the all-for-one-and-one-for-all "Three Musketeers" trading opposite the technical funds in the Managed Money category for fun, profit and price management.

Under the hood in the Disaggregated COT Report, the Managed Money added 28,099 long positions on that rally---and sold/covered 22,799 short contracts.  Once again, as Ted said, it's one group of traders selling to another that set the price---up and down.  It's the same old, same old.

It was the same in silver.  During the reporting week, we had four up days followed by a big down day.  During the four 'up' days, the silver price rose by about $1.25---and gave up almost half of that on the one big engineered price decline last Tuesday.

On those price moves on those five trading days, the Commercial net short position exploded by a stunning 24,382 contracts, almost 122 million ounces of silver in five trading days, or the equivalent of 53 days of total world silver production.  This is, by a very wide margin, the largest 1-week change in the Commercial net short position in silver in the history of the COMEX.

The 'Big 4' short holders added 6,600 contracts to their short position, but the '5 through 8' traders actually decreased their short position by 400 contracts.  However, the small Commercial traders, Ted's raptors, took up the slack by selling 18,200 long contracts for a profit.  Ted says the JPMorgan's short-side corner in the COMEX silver market is in the 19-20,000 contract range, which puts them up there with Canada's Scotiabank as the biggest COMEX silver short on Planet Earth.

Under the hood in the Managed Money category, the technical funds there added 8,554 long contracts and covered/sold 19,680 short contracts as the rally they started, unfolded during the reporting week.

Ted said the the COT Report in silver went from bullish to wildly bearish in just one week.  We now have the worst Commercial net short position in silver going all the way back to the end of December 2014.

If the Commercial traders hadn't been there to step in front of the Managed Money traders on this rally, we would be looking at a silver price of many hundreds of dollars---and a gold price of many thousands.  But, as always, JPMorgan et al were there to buy enough short contracts and sell enough long contracts in order to kill these rallies stone-cold dead.  This is what JPMorgan calls adding "liquidity" to the markets.  I call it price rigging---and you can call it what you want.

To be fair however, the reason that this report was such a standout in both gold and silver was the confluence of two separate events.  The first was a big rally the day before the cut-off at the start of the reporting week---and and the big engineered price decline on Tuesday to end the reporting week.

It's my opinion that some of the data from the rally the day before the cut-off for this week's COT Report [Tuesday, May 12] got shoved into this reporting period---and not all of the data from Tuesday's big engineered price decline was reported in a timely manner, either.  The confluence of those two events made this week's report one for the record books---and I'll be surprised if its ever broken.

This is the Reader's Digest version of the reporting week's events---and I'll be looking forward to what Ted has to say about all this in his weekly report to paying subscribers this afternoon EDT.

Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" in all physically traded commodities on the COMEX.  Please note that the eight largest traders in silver are now short the equivalent of 6 months world silver production.  It's my estimation that JPMorgan and Canada's Scotiabank are currently short around 90 days of world silver production between them.

It was another busy week over at the Shanghai Gold Exchange for the week ending on Friday, May 15---as they reported that 45.480 tonnes were withdrawn.  A hair over 900 metric tonnes have been withdrawn from the SGE since the start of the year.  Here's Nick Laird's most excellent chart.

I have a decent number of stories for a weekend column, so I hope you can find the time in what's left of it to read the ones you like.

 

¤ Critical Reads

JPMorgan Officially Apologizes For Being a Criminal Market Manipulator

MAY 20, 2015 DISCLOSURE NOTICE

The purpose of this notice is to disclose certain practices of JPMorgan Chase & Co. and its affiliates (together, “JPMorgan Chase” or the “Firm”) when it acted as a dealer, on a principal basis, in the spot foreign exchange (“FX”) markets. We want to ensure that there are no ambiguities or misunderstandings regarding those practices.

To begin, conduct by certain individuals has fallen short of the Firm’s expectations. The conduct underlying the criminal antitrust charge by the Department of Justice is unacceptable. Moreover, as described in our November 2014 settlement with the U.K. Financial Conduct Authority relating to our spot FX business, in certain instances during the period 2008 to 2013, certain employees intentionally disclosed information relating to the identity of clients or the nature of clients’ activities to third parties in order to generate revenue for the Firm. This also was contrary to the Firm’s policies, unacceptable, and wrong. The Firm does not tolerate such conduct and already has committed significant resources in strengthening its controls surrounding our FX business.

But nobody went to jail.  Then there's the unmentionable crime against humanity by JPMorgan et al---the price management scheme against the precious metals in particular---and commodities in general.  This disclosure notice appeared on the JPMorgan website on Wednesday---and it's courtesy of Dan Lazicki.  I borrowed the headline from a Zero Hedge article.

Matt Taibbi: World’s Largest Banks Admit to Massive Global Financial Crimes, But Escape Jail (Again)

In an interview with Democracy Now!, Rolling Stone journalist Matt Taibbi spoke about the recent news surrounding the five major banks – Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland and UBS – who pled guilty to rigging the price of foreign currencies and interest rates. Their fines amount up to more than $5 billion.

“They were monkeying around with the prices of every currency on Earth,” Taibbi told Amy Goodman. “So, if you can imagine that anybody who has money, which basically includes anybody who’s breathing on the planet, all of those people were affected by this activity. So if you have dollars in your pocket, they were monkeying around with the prices of dollars versus euros, so you might have had more or less money fractionally, depending on all of this manipulation, every single day.”

There's a 33:15 minute video interview, but there's also a transcript.  This excellent commentary by Matt appeared on the alternet.org Internet site on Thursday---and it's the first offering of the day from Roy Stephens.

N.Y. State investigators think Feds missed the bulk of big banks' forex rigging

Wall Street banks are facing the threat of new and more damaging allegations about their rigging of foreign exchange markets, as New York's banking regulator intensifies a probe into computer-driven currency trading -- raising the prospect that the total penalties arising from the scandal will exceed the $10 billion already paid.

The New York Department of Financial Services, run by Benjamin Lawsky, has become increasingly convinced that banks have been systematically abusing forex markets through the use of automated trades driven by computer algorithms, according to people familiar with its investigation.

Findings from the probe may indicate more widespread market abuse than U.S. and U.K. authorities disclosed on Wednesday, when detailing their settlement with six global banks, the people added. They pointed out that this $5.6 billion settlement related to allegations of market manipulation by bank employees -- but Mr Lawsky's probe covers electronic trading, which accounts for the majority of forex transactions.

The above three paragraphs are all that's posted in the clear from this Financial Times story from yesterday---and I found it embedded in a GATA release.

SEC Commissioner Furious That SEC Has Made a Mockery of "Recidivist Criminal Behavior" by Banks

Yesterday, in the aftermath of the latest settlement by the world's biggest banks, who finally admitted they have criminally rigged virtually all markets since the Great Financial Crisis (and prior) despite promising repeatedly they would not do that after having been caught time and again and punished with ever "harsher" wrist slaps, we wrote that the "Public Is Confused Why World's Biggest Banks Admitting Criminal Fraud, Leads To Public Yawns."

It appears the public is not the only one who is confused, or yawning, that yet again banks get away with just another penalty (to be paid by their shareholders) and zero jail time for the perpetrators despite what is supposedly "criminal" rigging: none other than a SEC regulator working for the same enforcer who "punished" the Too Big To Prosecute banks only to immediately grant them waivers to continue business as usual, is just as confused.

Here, two weeks after SEC commissioner Cara Stein raged that the SEC would turn a blind eye to Germany's Deutsche Bank for a "Decade Of Lying, Cheating, And Stealing", is her dissenting opinion with the SEC settlement, this time broadening her anger to include all the banks, not just the German one.

This 'dissenting statement' appeared in this Zero Hedge article that appeared on their website at 7:58 a.m. EDT on Friday morning---and it's worth reading if you have the time.  It's the second offering of the day from Dan Lazicki.  There was more commentary on this in a story that was posted on the wallstreetonparade.com Internet site yesterday---and it's headlined "DoJ Calls Out UBS Rap Sheet; Ignores Homegrown Citigroup’s Rap Sheet"---and I thank Richard O'Mara for digging up that one for us.  It's worth reading as well.

Fed still seen in lift-off mode as Yellen takes center stage

The U.S. Federal Reserve is likely to stick with plans to raise interest rates later this year, with progress towards its employment and inflation goals helping allay concerns over the economy's recent weakness, current and former Fed officials say.

Fed Chair Janet Yellen, who on Friday will talk about the economy's prospects, is expected to acknowledge the recent sluggishness, including near stagnant performance in the first few months of the year.

But she will also probably repeat the mantra that better days should follow a temporary swoon, and highlight the economy's steady job growth, keeping the Fed on track for its first policy tightening in nearly a decade.

Hours ahead of her speech inflation showed a flicker of life, with the Consumer Price Index, once stripped of volatile food and energy components, recording a 0.3 percent rise in April. Though the Fed uses another measure for its 2 percent target, the CPI report on Friday showed prices increasing across a broad set of items, giving the Fed "affirmation core trends are moving their way," said TD Securities analyst Eric Green. "In effect, inflation is not an obstacle to tightening."

Well, dear reader, I'll believe this rate increase when I see it.  This Reuters article, filed from New York, showed up on their Internet site at 11:47 a.m. EDT yesterday---and I thank Orlando, Florida reader Dennis Mong for sharing it with us.

Doug Noland -- Paying for the Past: Insight from Lindsey, Fisher and Greenspan

The root cause of a complex predicament is actually rather uncomplicated: it’s called inflationism. And there’s a reason why I am not the least bit optimistic. Despite centuries of history, we’ve somehow bought into the fallacy that “money printing” can resolve structural issues (financial, economic and social). In the face of overwhelming contrary evidence, central bankers and their supporters have clung to the sophistry that they can raise prices levels – in the real economy and securities markets – and that such inflation supports system growth and stability. Central banks have over-promised and have been too content to feed fanciful notions of their omnipotence and overwhelming power. Progressively bolder “activist” central bankers were afforded way too much discretion to experiment. In the end, their inflationary policies primarily inflated asset prices and securities market speculative Bubbles. And each policy error – accommodating or, worse yet, orchestrating a new Bubble – invariably led to only bigger blunders. The greater the boom and bust the more outlandish the subsequent reflationary cycle and attendant Bubbles.

For today’s readers and for the reader in 2065, it is imperative to appreciate that the Fed (and global central bankers more generally) is today trapped. Borrowing from Larry Lindsey, “We’re at the point of absurdity.” Yet normalization from absurd rates and central bank monetization is indefinitely deferred because of fears of bursting Bubbles. The great danger of central bank controlled, market-based finance has come to fruition: central bankers see no alternative than to allow Bubbles to run wild. And unhinged markets will do what unsound markets do: go to self-reinforcing precarious excess.

The nature is unclear and the course always uncertain. The end game, however, is never in doubt. Inflationism is seductive – it sets an incredibly powerful trap. And it inevitably reaches the point of no return. If only the Fed would quickly mend its ways and begin normalizing rates. I very much wish it wasn’t too late. But these global Bubbles are not going to tolerate anything like normality.

Doug's weekly Credit Bubble Bulletin is always a must read for me---and this one is no exception.  I thank reader U.D. for passing it around early yesterday evening.

Hundreds of Tech Companies Line Up to Oppose TPP Trade Agreement

More than 250 tech companies have signed a letter demanding greater transparency from Congress and decrying the broad regulatory language in leaked parts of the controversial Trans-Pacific Partnership trade bill.

The TPP would create an environment hostile to journalists and whistleblowers, said policy directors for the Electronic Frontier Foundation and Fight for the Future, co-authors of the letter. “TPP’s trade secrets provisions could make it a crime for people to reveal corporate wrongdoing ‘through a computer system’,” says the letter. “The language is dangerously vague, and enables signatory countries to enact rules that would ban reporting on timely, critical issues affecting the public.”

Among the signatories is activist, sci-fi author and The Guardian tech columnist Cory Doctorow. “Democracies make their laws in public, not in smoke-filled rooms,” Doctorow wrote. “If TPP’s backers truly believed that they were doing the people’s work, they’d have invited the people into the room. The fact that they went to extreme, unprecedented measures to stop anyone from finding out what was going on – even going so far as to threaten Congress with jail if they spoke about it – tells you that this is something being done to Americans, not for Americans.”

This story, which originally appeared on The Guardian website, was reposted on the alternet.org Internet site on Thursday---and it's the second contribution of the day from Roy Stephens.

Hyperinflation in Venezuela, which just pawned its gold

Venezuelans are dumping their rapidly-depreciating currency at a quicker pace, leading to a staggering plunge in its free-market value, as the crisis-plagued economy edges closer to an outbreak of hyperinflation.

DolarToday, a widely followed website that tracks exchanges made near the Colombian border, reported today that the bolivar had lost a quarter of its value over the last seven days.

Everyone in smartphone-obsessed Caracas seemed to learn of the crash at the same time as the DolarToday app, a ubiquitous tool in the South American country, sent out a series of messages announcing the new rates under the headline "Hyperinflation!"

Venezuelan currency was trading at around 420 bolivars per dollar Friday afternoon, according to the site. That was down from 300 bolivars per dollar on May 14 and 173 at the start of the year.

This AP story from yesterday afternoon EDT was filed from Caracas---and was subsequently picked up by the news.yahoo.com Internet site---and is a must read.  I found it on the gata.org Internet site last night.

Bank of England accidentally emails Brexit task force plans to newspaper

The Bank of England has accidentally revealed that it has set up a task force to look at how a U.K. exit from the European Union will affect the economy.

"Project Bookend" - as the Bank has dubbed the initiative - will be led by Sir Jon Cunliffe, deputy governor and a board member at the Prudential Regulatory Authority.

However, it is how the plans have been revealed that will cause embarrassment at the central bank.

Details of the task force, as well as how Bank officials should deal with media questions regarding a "Brexit", were accidentally e-mailed to The Guardian.

The e-mail was sent from Sir Jon's secretary to four senior executives at the Bank - Iain de Weymarn, Governor Mark Carney's private secretary; Nicola Anderson, head of risk assessment in the financial stability department; Phil Evans, director of the international division; and Jenny Scott, executive director communications. However, it was also accidentally forwarded to an editor at The Guardian.

You couldn't make this stuff up!  This news item appeared on the telegraph.co.uk Internet site at 7:45 p.m. BST in London yesterday evening, which was 2:45 p.m. EDT in Washington.  I thank South African reader B.V. for sending it our way.

Apple and Google Just Attended a Confidential Spy Summit in a Remote English Mansion

At an 18th-century mansion in England’s countryside last week, current and former spy chiefs from seven countries faced off with representatives from tech giants Apple and Google to discuss government surveillance in the aftermath of Edward Snowden’s leaks.

The three-day conference, which took place behind closed doors and under strict rules about confidentiality, was aimed at debating the line between privacy and security.

Among an extraordinary list of attendees were a host of current or former heads from spy agencies such as the CIA and British electronic surveillance agency Government Communications Headquarters, or GCHQ. Other current or former top spooks from Australia, Canada, France, Germany and Sweden were also in attendance. Google, Apple, and telecommunications company Vodafone sent some of their senior policy and legal staff to the discussions. And a handful of academics and journalists were also present.

According to an event program obtained by The Intercept, questions on the agenda included: “Are we being misled by the term ‘mass surveillance’?” “Is spying on allies/friends/potential adversaries inevitable if there is a perceived national security interest?” “Who should authorize intrusive intelligence operations such as interception?” “What should be the nature of the security relationship between intelligence agencies and private sector providers, especially when they may in any case be cooperating against cyber threats in general?” And, “How much should the press disclose about intelligence activity?”

This interesting story showed up on The Intercept website yesterday morning EDT---and it's another contribution from Roy Stephens.

Welsh wing-maker Airbus E.U. exit warning

The president of aerospace giant and Welsh wing-maker Airbus says the firm would reconsider U.K. investment if Britain left the European Union.

Paul Kahn said Britain must compete for international investment.

The company employs 6,000 people at its wing factory at Broughton, Flintshire, and a further 4,000 at Filton, Bristol.

The comments follow the head of JCB stating Britain should not fear an E.U. exit. It employs about 500 people at its Wrexham plant.

But speaking to the BBC, the Airbus president said the best way to guarantee continuing investment was "by remaining part of the E.U."

This BBC article was posted on their website on Thursday, but I saved it for today because there's a youtube.com video about how this company makes wings for the new Airbus 380.  I watched it a couple of weeks ago---and if the manufacturing process fascinates you, as it does me, this video is a must watch---and it's linked here.  By the way, this wing plant in Wales is not going anywhere, with or without the U.K. being in the E.U.  The reader that send me this story wishes to remain anonymous.

Italy's 'eternally unfinished' highway enters final stretch - 50 years after construction began

Back in 1966, Lunar 9 was the first spacecraft to achieve a controlled landing on the Moon, England won the World Cup, and Italy opened the first section of the Salerno to Reggio Calabria motorway.

In the intervening half-century space missions have gone on to greater things, England have struggled to repeat their success, and, incredibly, Italy is still plodding on with the construction of the A3, “the eternally unfinished autostrada”, as it’s known.

Construction of the 443km stretch of road, which is supposed to run from Salerno, just south of Naples, down to the capital of the Calabria region, in the toe of the Italian boot, has been plagued by faulty construction, delays and scandal. Campaigners say that during this time it’s come to look like the incarnation of everything that’s wrong with the country, hamstrung by corruption and bad management. “It’s a symbol of how public works are in Italy,” said Stefano Zerbi, spokesman for the national consumer organisation, Codacons.

It’s not lost on anyone that the road stretches from Campania, the regional home of the Camorra crime syndicate, and then passes through the ‘Ndrangheta badlands, including towns such as Rosarno and Gioia Tauro.

Obviously I don't know much about it Italy, because my jaw hit the floor, as I couldn't believe what I was reading.  Truth is really stranger than fiction---and for that reason you should seriously consider reading this.  It appeared on the independent.co.uk Internet site on Wednesday---and for obvious reasons had to wait for today's column.  Once again I thank Roy Stephens for sharing it with us.

Eastern Promises: Riga Summit Ends With Division, Little Progress

The Eastern Partnership summit in Riga ended with growing divisions and no promises on issues of visa-free travel, which worried some members.

The European Union's Eastern Partnership summit with six ex-Soviet states ended with little progress as the partnership countries were divided in their aspirations for European integration and their goals for visa-free travel.

The representatives of Armenia, Azerbaijan and Belarus refused to sign the initial document which stated that the summit condemned Russia's reunification with Crimea, which the document called an "illegal annexation." Ukrainian President Petro Poroshenko, who was waiting for a "signal" from the E.U. on a visa-free regime, was told by German Chancellor Angela Merkel that the E.U. is not ready for it.

This news item was posted on the sputniknews.com Internet site at 5:08 p.m. Moscow time on their Friday afternoon, which was 10:08 a.m. EDT in Washington.  It's another contribution to today's column from Roy Stephens.  There was a Bloomberg story on this Riga Summit.  It's headlined "Greek Talks Break Up as Earlier Optimism Evaporates"---and it showed up on their Internet site at 5:05 p.m. Denver time on Thursday afternoon.  I found it in yesterday's edition of the King Report.

John Batchelor Interviews Stephen F. Cohen

Just when events are said to be winding down in the Ukraine Civil War we see that after Assistant Sec. State, Nuland’s visit to Moscow last weekend and her assurances that Kiev is on side with Minsk2, the Donetsk Airport area just a day later came under the heaviest shelling for months.

And John Batchelor and Stephen F. Cohen make an effort to find out what is really happening through the “fog of diplomacy” with this process. Last week they see three main features of interest and new very serious global concerns for the  New Great Game:

1) Dimitry Medvedev, the Russian Prime Minister disallows use for USA to supply Afghanistan from Russian Federation territory.

2) Kyiv is claiming the capture of two Russian soldiers.

3) And probably most important, a positional statement from the Carlisle Barracks, the United States Army War College, that essentially told the White House that a containment policy against Russia will not work and it is time to consider one of cooperation and competition. At present, as the parties work out strategies the United States, NATO, Russian and Europe, our esteemed pundits here try to determine whether the Western players, especially Washington, are truly backing away from supporting Kyiv or whether this is a ploy.

If you're following events in the Ukraine, this 39:50 minute audio interview is certainly worth your while.  It was posted on the johnbatchelorshow.com Internet site on Tuesday---and I thank Larry Galearis for bringing it to our attention.

What if Putin is Telling the Truth? -- F. William Engdahl

On April 26 Russia’s main national TV station, Rossiya 1, featured President Vladimir Putin in a documentary to the Russian people on the events of the recent period including the annexation of Crimea, the U.S. coup d’etat in Ukraine, and the general state of relations with the United States and the E.U. His words were frank. And in the middle of his remarks the Russian former KGB chief dropped a political bombshell that was known by Russian intelligence two decades ago.

Putin stated bluntly that in his view the West would only be content in having a Russia weak, suffering and begging from the West, something clearly the Russian character is not disposed to. Then a short way into his remarks, the Russian President stated for the first time publicly something that Russian intelligence has known for almost two decades but kept silent until now, most probably in hopes of an era of better normalized Russia-U.S. relations.

Putin stated that the terror in Chechnya and in the Russian Caucasus in the early 1990’s was actively backed by the CIA and western Intelligence services to deliberately weaken Russia. He noted that the Russian FSB foreign intelligence had documentation of the U.S. covert role without giving details.

What Putin, an intelligence professional of the highest order, only hinted at in his remarks, I have documented in detail from non-Russian sources. The report has enormous implications to reveal to the world the long-standing hidden agenda of influential circles in Washington to destroy Russia as a functioning sovereign state, an agenda which includes the neo-nazi coup d’etat in Ukraine and severe financial sanction warfare against Moscow. The following is drawn on my book, “The Lost Hegemon” to be published soon…
 

This is your big read of the day---and is an absolute must read for any serious student of the New Great Game.  It put in an appearance on the journal-neo.org Internet site a week ago Friday and, not surprisingly, it's courtesy of Roy Stephens---and is another piece that had to wait for a spot in my Saturday missive.

New Silk Road vs. TPP: East and West Enter 'War' For Dominance in Eurasia

As China's New Silk Road project is seemingly aimed at a "revolutionary change" in the global economic map, it may lead to a serious confrontation between the East and the West over Eurasian dominance, says U.S. analyst Robert Berke.

Washington's new Trans-Pacific Partnership (TPP) initiative that leaves out both China and Russia, has clearly demonstrated that U.S. participation in China's New Silk Road project seems unlikely while its "opposition is all but certain," American energy financial analyst Robert Berke stated in a recent article on Oilprice.com.

"The [New Silk Road] project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between east and west for dominance in Eurasia," the financial analyst stressed.

The New Silk Road is expected to connect Asia, Europe and Africa.

This article was posted on the sputniknews.com website at 6:27 p.m. Moscow time on their Friday evening---and it's definitely worth reading.  Once again I thank Roy Stephens for digging it up for us.

China Jams U.S. Spy Drones Over Disputed South China Sea Islands

China tried to electronically jam U.S. drone flights over the disputed South China Sea in order to prevent surveillance on man-made islands Beijing is constructing as a part of an aggressive land reclamation initiative, U.S. officials said.

Global Hawk long-range surveillance drones were targeted by jamming in at least one incident near the Spratly Islands, where China is building military facilities on Fiery Cross Reef, the Washington Free Beacon reported.

That statement follows Thursday reports that the Chinese navy warned a U.S. surveillance plane to leave the same area eight times in an apparent effort to establish and enforce a no-fly zone, a demand Washington rejected.

This news item appeared on the sputniknews.com Internet site at 11:00 p.m. Moscow time on their Friday evening, which was 4 p.m. EDT.  It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.

Two more Hong Kong stocks collapse after Hanergy crash

Two of Hong Kong's best-performing stocks plunged more than 40 percent Thursday, a day after a mysterious crash of almost 50 percent in Chinese solar firm Hanergy that saw almost $20 billion wiped off its market value.

Goldin Financial sank 43.34 percent to HK$17.48 and Goldin Properties crashed 40.91 percent to HK$14.36, after soaring more than 300 percent since the start of January, according to Bloomberg News.

The companies, which have interests ranging from property development in Hong Kong and China to vineyards in California and France are owned by Chinese tycoon Pan Sutong.

The dramatic sell-off came after a 47 percent dive in Beijing-based solar energy firm Hanergy Thin Film Power (HTF).

This business-related AFP story, filed from Hong Kong on Thursday local time, ended up on the terradaily.com Internet site---and it's worth skimming.

Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on Friday’s release of economic data, BitGold’s recent merger with Gold Money, the lending of more funds to Greece by the European Central Bank, and the smash in gold on yesterday morning.

This 11:18 minute audio clip with host Geoff Rutherford was posted on the sprottmoney.com Internet site yesterday evening.

BitGold to acquire GoldMoney for shares in transaction estimated at C$52 million

BitGold Inc., a platform for savings and payments in gold, announces that it has entered into an acquisition Agreement to purchase the operating and intellectual property assets of GoldMoney Network Ltd., subject to regulatory approvals and other customary closing conditions.

With over C$1.5 billion in assets under vault management, GoldMoney is among the world's largest private managers of precious metal assets, renowned for its innovation and integrity in the gold market.

Upon closing of the acquisition agreement, BitGold will acquire the intellectual property and operating assets of GoldMoney in exchange for the issuance of 11,169,794 common shares in BitGold, valuing the transaction at C$51.9 million based on BitGold's C$4.65 closing price on May 21. The transaction is expected to close within 60 days.

This news item, filed from Toronto, showed up on the businesswire.com Internet site yesterday at 07:50 a.m. EDT---and I found it embedded in a GATA release.

Koos Jansen: Chinese gold leasing is much lower than establishment claims

Welcome to another episode of understanding how mainstream consultancy firms (the World Gold Council, GFMS, CPM Group, Precious Metals Insights) understate Chinese gold demand. One of their main arguments is that hundreds if not thousands of tonnes are tied up in Chinese Commodity Financing Deals (CCFDs). As it was first stated by the World Gold Council (China’s Gold Market Progress And Prospects, April, 2014):

No statistics are available on the outstanding amount of gold tied up in financial operations [CCFDs] linked to shadow banking but Precious Metals Insights believes it is feasible that by the end of 2013 this could have reached a cumulative 1,000 tonnes.

Many mainstream news outlets, such as Reuters and the Financial Times, copied this segment, writing something along the lines of “1,000 tonnes is tied up in financing deals, it’s all a fraud and when this will be unwound the gold will flush the Chinese market”. In reality there was not 1,000 tonnes tied up in financing deals in 2013, as was portrayed by the WGC report.

This rather brief commentary appeared on the bullionstar.com Internet site early yesterday morning Singapore time---and I thank Koos for passing it around.  It's worth reading.

Kronen Zeitung: Austria Repatriates 110 Tonnes of Gold From U.K.

Austria is repatriating gold from the vaults at the Bank Of England (BOE) at this very moment, according to Kronen Zeitung. The OeNB (central bank of the Republic of Austria) stored 82 % of its 280 tonnes at the depository in England. It will start by bringing back 110 tonnes to Austria, to eventually have 50% on its own soil. 

This was to be expected as Austria has steadily working to move more of its official gold reserves from unallocated to allocated accounts in recent years, and additionally reduced its gold leased out by a staggering 60%.

This is another brief commentary from Koos---and it appeared on the bullionstar.com Internet yesterday afternoon Singapore time.  It's definitely worth reading as well.  Here's the Zero Hedge spin on this story---and it's headlined "Austria Confirms Faith in Fiat Fading: Repatriates 110 Tons of Gold From BoE"---and I thank reader 'David in California' for passing that one around yesterday morning.

China on a gold standard? Food for thought at least -- Lawrence Williams

On Friday at Bloomberg’s own  Precious Metals forum in London, Hoffmann gave a further short talk setting out the hypothesis – seeing the possibility of China going down this route as a possible Black Swan scenario.  While, in a short article released at the event he admits that the backing of the yuan fully by gold is an exercise that is highly unlikely and that in any case the Chinese government would not wish to have its monetary policy hands tied to the extent a traditional gold standard would suggest.  Indeed he admits that while the debate on this is an interesting one, ‘the idea of China on the gold standard is likely to remain in the alchemist’s lab for now’.

So what Hoffmann has done is to bring the idea of a Chinese introduction of some form of gold standard into the debate and for that he should be praised rather than vilified by those who find the whole idea counter to their own views.  The Chinese are indeed capable of springing surprises on the West.  As pointed out earlier the Chinese have a different way of thinking than us westerners.  They tend to operate with the kind of long term game plan no longer even considered in most capitalist countries and with a centrally controlled economy are perhaps far better placed to implement economic reforms which are to their ultimate benefit which might be considered impossible in the Western thought train.

So while a Chinese return to some kind of gold standard may be extremely unlikely, one perhaps should not write the idea off as totally impossible, and Hoffmann has done us a favour in getting us to think outside the box ourselves.

This short commentary by Lawrie was posted on his own website yesterday---and it's worth the read as well.

 

¤ The Funnies

As I was waiting quietly late on Sunday afternoon, this fellow flew in.  He's not the sort of bird you sneak up on, as it would be long gone before you got close enough for a photo, regardless of how big your lens was.  Once he started search for tidbits amongst the rocks, he paid me no mind.  This is a spotted sandpiper---and they're found just about everywhere in North America.  This is one I had to look up in the bird book---and it's a bit smaller than a robin.















Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” 

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained. 

Please visit our website for more information about the project.

 

¤ The Wrap

It must be remembered that the crooked bookmaking operation in COMEX silver is visible in many ways. For one, it is reflected in the fact that the biggest 4 and 8 commercial bookies have always held such a dominant control on the market that COMEX silver has the largest concentrated short position of any regulated commodity in terms of real world production or consumption. I know this has been true just about forever and because of that longevity, the shock value of what it represents gets diminished over time. But now with silver down close to 70% from the highs of 2011, the existence of the most concentrated short position of all commodities should be a much bigger deal than it ever was before.

The simple fact is that there is no economic justification for a commodity down in price as much as silver---and at or below the primary cost of production to have a larger concentrated short position than any other commodity. This is particularly true when no legitimate producer holds any of the concentrated short position; only large banks and financial institutions engaged in a bookmaking scam.

Because the silver bookmaking scam is becoming more clear to observers on a daily basis, I am becoming more convinced the scam is about to blow up and with it, the ongoing manipulation of the price of silver. If what I’ve just described is close to being accurate (and I believe it is completely accurate), the end game resides in my recent discovery that JPMorgan has acquired hundreds of millions of ounces of actual silver. - Silver analyst Ted Butler: 20 May 2015

Today's pop 'blast from the past'  was composed in 1946.  It was recorded by many artists, however it wasn't a hit until Bobby Darin recorded it back in 1958---but it wasn't released until 1959.  This youtube.com video clip [in B&W] shows him with a very young Dick Clark.  The link is here.

Today's classical 'blast from the past' is known by just about everyone on Planet Earth.  The work is  best known for its last movement, but the other movements are equally as wonderful if your a classical music affectionado.  It's the overture from Rossini's opera William Tell that was premiered in 1829.  The overture is in four parts, each following without pause.  It's performed here by the Berlin Philharmonic---and they serve it up just right.  It's worth your while---and the link is here

Yesterday's price action in the precious metals had all the hallmarks of another engineered take-down in precious metals by JPMorgan et al.  It should be obvious that they don't give a flying %$#& about the fact that they're about as subtle as a brick through a plate glass window.

Here are the 6-month charts for all four precious metals updated with Friday's price/volume data.

In last Saturday's missive I gingerly made these comments about the current state of the rallies in both gold and silver  "Excuse me for thinking this, but the price action of the last couple of days has all the hallmarks of a top [hopefully temporary] in these rallies.  In addition to the cooling-off in the precious metal prices themselves, their associated equities have not exactly been roaring to the upside.  The charts below look toppy to me, as does the HUI."

In hindsight, and with the current COT numbers staring us in the face, I didn't know how right that statement would turn out to be.  And the fact that "da boyz" pulled it off in less than five trading days---and on such tiny rallies in both silver and gold---should indicate that they're not going to allow precious metal prices to go anywhere at the moment.

I have no qualms about stating the fact that current COT structure, even discounting it a bit for Tuesday's non-reported data, should scare the bejesus out of anyone.  It certainly does me.  The stage is set for a brutal take-down in the prices of gold, silver and platinum.  The only question remaining is will it be by one single thrust, or death by a thousand cuts?  I'd bet money on the latter, as "da boyz" can slice these precious metal salamis all summer long, all the while ringing the cash register in the process and declaring that the "summer doldrums" in the precious metals are upon us once again---doldrums that they themselves manufactured.

What a crock.

Looking at the above charts, seventy bucks or more in gold is not out of the question, as is two dollars in silver.  Remember, it's not the price, but the number of contracts.  Over the next few months JPMorgan et al will probably keep engineering prices lower until we reach some sort of capitulation at the end of the process.  This is their standard operating procedure.  That will occur, as it always does, when the Commercials have forced the Managed Money players to sell as many long contracts as possible---and enticed them to go as short as possible.  We've been down that road many times in the last four years, so you should know the drill by now.

The miners, the World Gold Council, The Silver Institute, GFMS, CPM Group et al---know it too, but pretend that it's not happening.  But we're so far down the road on this that they can't admit it now, or even make mention of it.  That includes the CFTC and the CME Group, which Ted Butler says, are actually enabling all of this.

The price management scheme in the precious metals is by far the most important criminal activity that the banks are involved in---as the ramifications of a free-market price in precious metals in particular---and commodities in general---would bring the entire world's economic, financial and monetary system to its knees overnight.

It's Jim Rickards "Currency Wars"---and the "Death of Money"---on steroids.  It will end in time, of course, but for the moment the war against the producing class by the West's financial elite goes on.  I consider it to be a line item in the Wolfowitz Doctrine as well.

The Russians and Chinese are more than aware of all of this---and if push really becomes shove, you just never know what might happen.

That's all I have for the day---and the week.  If the precious metal markets are open on Monday, I'll certainly have a report on Tuesday.

Enjoy what's left of your weekend---and I'll see you then.

Ed Steer