01 August 2015 — Saturday


The gold price opened flat—and stayed there until some thoughtful soul peeled about five bucks off the price starting around 9 a.m. Hong Kong time.  The price edged lower until 1 p.m. BST in London—and took off from there—twenty minutes before the COMEX open and the swan dive in the dollar index.  In some respects, the rally had all the hallmarks of a “no ask” market, which it might have been for an hour or so.

The [short covering?] rally got capped the moment that the price touched the $1,100 spot mark, which happened to be the exact time that the equity markets opened in New York.  By around 10:40 a.m. the price had been beaten back a safe distance from that level—and it chopped sideways for the remainder of the Friday trading session.

The CME Group recorded the low and high ticks as $1,079.20 and $1,103.00 in the December contract.

Gold finished the Friday session at $1095.20 spot, up $6.90 from Thursday.  Net volume was very decent at 147,000 contracts, so it’s obvious that this rally didn’t go unopposed.

Reader Brad Robertson forgot to send me the 5-minute gold tick chart until Saturday morning, so I decided to stick it in here, even though it has been many hours since I posted today’s column.  As you can see, the volume was pretty decent during that rally.  The other thing I noticed was that the 5 buck drop in the gold price in Far East trading on their Friday morning shows virtually no volume associated with it at all.  Midnight EDT is the dark gray vertical line, add two hours for New York time—and don’t forget the ‘click to enlarge’ feature, you’ll need it.

The silver chart was almost a carbon copy of the gold price action—and the silver price got stopped cold before it could touch the $15.00 per ounce mark.  From there it actually got sold down into negative territory, but managed to catch a bid in electronic trading and finished in the black by the 5:15 p.m. close.

The low and high ticks were reported as $14.51 and $14.97 in the September contract.

Silver closed yesterday at $14.79 spot, up 6 cents from Thursday.  Net volume was 37,500 contracts, which is certainly more than I wanted to see.

As I mentioned in The Wrap yesterday, the HFT boyz were really after platinum and palladium starting shortly after the Zurich open—and their 8 a.m. EDT rallies were dealt with very harshly once they were capped at 9:30 a.m. as the equity market opened in New York.  Both were closed down on the day.  Platinum finished the day at $982 spot, down five bucks from Thursday’s close—and palladium ended the Friday session down 9 dollars at $609 spot.  Here are the charts.

The dollar index closed late on Thursday afternoon in New York at 97.49—and chopped lower until at, or shortly after, the 8:20 a.m. COMEX open.  Then it fell off a cliff, with the 96.31 low coming around 9:15 a.m. EDT.  It got rescued from there until its secondary peak shortly before 3 p.m.—and it traded mostly flat into the close, finishing the Friday session in New York at 97.21—down only 28 basis points.  It was down 128 basis points at the low tick.

Here’s the 6-month U.S. dollar index so you can watch the trend as it unfolds.

The gold stocks gapped to their highs of the day right at the 9:30 a.m. open—and at the exact moment that the gold price got capped as it hit the $1,100 spot price mark,  It sold down to its low of the day about an hour later, but crawled higher from there for the remainder of the Friday session.  The HUI closed higher by 3.05 percent.

The silver equities hit their highs at 10 a.m. EDT—and then fell to their lows at the same time that the gold stocks hit their lows.  From there, the silver equities rallied back almost to their highs of the day, but couldn’t hold it, as they slid down quit a bit in the last few hours of trading.  Nick Laird’s Intraday Silver Sentiment Index closed up only 1.38 percent.

For the week the HUI closed down 2.75 percent—and the ISSI was lower by 3.54 percent.

The CME Daily Delivery Report showed that 256 gold and 16 silver contracts were posted for delivery  within the COMEX-approved depositories on Tuesday.  in gold, the only short/issuer was Canada’s Scotiabank with 256 contracts.  The three largest long stoppers were HSBC USA, Goldman Sachs—and JPMorgan for its client account.  The amounts involved were 119, 78 and 48 contracts respectively.  In silver, the only short/issuer was JPMorgan out of its client account—and Canada’s Scotiabank stopped all of them.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest for August only fell by 917 contracts, leaving 8,298 contracts still open—and that’s a lot!  The 256 contracts posted for delivery in the above paragraph barely scratches the surface of what has to be delivered this month—and it will be interesting to see how things unfold as August progresses.  I just know that Ted Butler will have something to say about this in his weekend commentary later today.  In silver, August o.i. fell by 20 contracts, leaving 89 open, which is nothing, as August is not a traditional delivery month for silver.

There was a big withdrawal from GLD to end the month, as an authorized participant, or maybe more than one, withdrew an chunky 239,579 troy ounces.  And as of 9:22 p.m. EDT yesterday evening, there were no reported changes in SLV.

From massive daily sales for days on end, the U.S. Mint didn’t report selling a single solitary bullion coin yesterday, in either gold or silver.  They did precisely what I said they might do—and that’s not report any more silver eagles sales for the July month, as they didn’t want to break January’s record—as that headline would have been plastered all around the world which is, I’m sure, what they intended.  Without doubt, whatever was sold on Friday will appear in Monday or Tuesday’s sales next week—and in the new month.

For the month of July, the mint sold a whopping 170,000 troy ounces of gold eagles—32,000 one-ounce 24K gold buffaloes—and 5,529,000 silver eagles.  [They sold 5,530,000 silver eagles in January.]  Their little games are oh-so obvious!

Nick Laird was kind enough to send me a bunch of charts regarding gold and silver coin sales from the U.S. Mint over  the years—and this one shows the dollar amount of gold and silver coin sales per month going back ten years.  You have to back to April 2013 to exceed gold coin sales in July 2015.  Gold coin sales include both gold eagles and buffaloes. The ‘click to enlarge‘ feature is a must here.

As you are aware, there are huge shortages in the retail bullion market for silver—and here’s the note that A-Mark sent out to all its customers the other day:

“A-Mark has temporarily suspended sales of Sunshine silver products.  The drop in the price of silver over the past month has come with a huge increase in demand for fabricated silver rounds, coins, and bars.”

“Supply has remained constant but with the uptick in interest in physical silver, Sunshine rounds and bars are delayed for delivery as far as three months in some cases.  We’re waiting to get caught up with existing orders before resuming sales of their products.”

“The timeline on when we’ll start taking orders again for Sunshine silver is unclear but we’ll keep you informed.  A-Mark is still selling  a few 100-oz. silver bars, Republic Metals 1-oz rounds and 10-oz bars, and several sovereign mint silver coins for delayed shipment.  Call for details!”

Over at the COMEX-approved depositories on Thursday, there was only 2,572 troy ounces of gold reported received, but an eye-watering 272,871 troy ounces were shipped out the door, with the lion’s share coming out of JPMorgan’s vault.  The rest came out of HSBC USA.  The link to that activity is here.

There was decent activity in silver.  Only 2,031 troy ounces were received—and 608,168 troy ounces were shipped out the door to parts unknown.  Virtually all of the ‘out’ activity was at HSBC USA.   Once again there was no activity at JPMorgan’s depository.  The link to the silver action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 1,392 kilobars—and shipped out a chunky 8,315 kilobars. A tiny bit of the ‘in’ activity [23 kilobars] was reported at the new kilobar gold depository at Loomis International, which just showed up on the CME’s website yesterday.  All the rest of the activity was at Brink’s Inc. as usual.  The link to all this activity, in troy ounces, is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was a mixed bag.  There was a slight deterioration in silver—and a decent improvement in gold.

In silver, the Commercial net short position in the legacy COT Report increased by 906 contracts, or 4.53 million troy ounces.  The Commercial net short position now stands at 60.4 million troy ounces, which is a shockingly bullish number in its own right.

Under the hood in the Managed Money category, they increased their long position by 89 contract and covered 1,667 short contracts.  The traders in the “Other Reportables” category increased their long position by 460 contracts, but also increased their short positions by 165 contracts during the same reporting week.  The difference was made up by the small traders in the “Nonreportable” category, as they sold 1,740 long contracts and also reduced their short position by 595 contracts as well.

It sounds like a lot was happening, but it really wasn’t.  In the grand scheme of things, it was a barely a rounding error.

I have to scroll through the copper numbers in the legacy COT Report on the way to the gold numbers, so I’ll mention them in passing.  The Commercial net long position in that metal increased by a chunky 5,404 contracts—and as JPMorgan et al engineered the copper price lower, they covered shorts and went long—as they tricked the technical funds in the Managed Money category to sell longs and go short.  The Commercial net long position in that metal now stands at 31,634 contracts.  Copper and crude oil, along with many other commodities have, as Ted Butler says, caught the “gold and silver disease.”

In gold, the Commercial net short position improved by a decent 6,318 contracts, or 631,800 troy ounces.  The Commercial net short position in gold now stands at 1.53 million troy ounces, which is basically immaterial.

There was very little change under the hood in the Managed Money category, as they sold 13 longs and added 1,064 new short contracts.  All the big moves that mattered came in the “other Reportables” category where they reduced their long positions by 4,730 contracts—and also covered 1,993 short contracts.  The small traders in the “Nonreportable” category sold 1,201 long contracts and went short an additional 1,303 contracts.  These small traders are as short the gold market as I can ever remember them being.

As Ted mentioned on the phone, what the report showed for the most part in silver is that we’re at the bottom of the barrel in that precious metal—and as of this COT Report, in gold as well.  There’s no blood left in these precious metal stones.

That goes for platinum and palladium as well, as no category in either metal in the current COT Report had a change in contracts of more than 600—and in most cases it was well under 150 contracts.  These are tiny, tiny markets—and only a few handful of contracts on the buy or sell side can change the prices by huge amounts—and yesterday’s price action would very much be a case in point.

Here’s Nick Laird’s famous “Days of World Production to Cover COMEX Short Positions” of the Big 4 and Big 8 traders in the COMEX futures market in all physically traded commodities.

Nick was also kind enough to send along the latest numbers from the Shanghai Gold Exchange—and the withdrawal for the week ending Friday, July 24 was a whopper—73.289 tonnes, the third largest week ever—and here’s his excellent chart.  The ‘click to enlarge‘ feature is a must.

I have a fairly decent number of stories for you today—and also some I’ve been saving for today due to length and content reasons.  I hope you can find enough time in what’s left of your weekend to read the ones that interest you the most.


‘Incredibly intrusive’: Windows 10 spies on you by default

Microsoft’s new Windows 10 operating system is immensely popular, with 14 million downloads in just two days. The price of the free upgrade may just be your privacy, though, as changing Windows 10’s intrusive default settings is difficult.

Technology journalists and bloggers are singing Windows 10’s praises, often using the words such as “amazing,” “glorious” and “fantastic.” The operating system has been described as faster, smoother and more user-friendly than any previous version of Windows. According to Wired magazine, more than 14 million people have downloaded their upgrade since the system was released on Wednesday.

While the upgrade is currently free of charge to owners of licensed copies of Windows 8 and Windows 7, it does come at a price. Several tech bloggers have warned that the privacy settings in the operating system are invasive by default, and that changing them involves over a dozen different screens and an external website.

According to Zach Epstein of BGR News, all of Windows 10’s features that could be considered invasions of privacy are enabled by default. Signing in with your Microsoft email account means Windows is reading your emails, contacts and calendar data. The new Edge browser serves you personalized ads. Solitaire now comes with ads. Using Cortana – the voice-driven assistant that represents Redmond’s answer to Apple’s Siri – reportedly “plays fast and loose with your data.”

This item put in an appearance on the Russia Today website at 10:39 p.m. Moscow time on their Friday evening, which was 3:39 p.m. EDT in New York [EDT+7 hours].  I thank Roy Stephens for today’s first story.

The War on Cash: Why Now? — Charles Hugh Smith

You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

These limits are broadly called “capital controls.”

This longish commentary showed up on the mises.org Internet site on Wednesday—and for that reason, had to wait for Saturday’s column.  I thank reader D’anne Blume for sharing it with us.  It’s certainly worth reading.

Doug Noland: Money and Spheres

One cannot overstate the integral role the inflation in Household Net Worth has played in the Fed’s reflationary policy making. Household Net Worth ended Q1 at a record 481% of GDP. This compares to 447% to end Bubble Year 1999 and 476% in Bubble Year 2007.

As was the case again during Q1, during the inflationary boom period, strong inflationary biases ensure that “wealth” increases a multiple of underlying Credit growth. This dynamic was on full display during both the tech and mortgage finance Bubble episodes. I recall being amazed at how $1 TN of mortgage Credit growth would fuel a $4.0 TN inflation in Household Net Worth. This “virtuous” dynamic turned vicious during the bust. The amount of new Credit required just to stabilize an inflated and maladjusted system becomes enormous.

There is now chatter of the Chinese government intervening in the stock market to the tune of $100bn in a single session. We’ve seen how, despite repeated bailouts and debt reductions, the Greek black hole grows only bigger. Meanwhile, with commodities in free-fall, it was another ominous week for EM. And these examples provide apt reminders of inflationism’s biggest flaw: once commenced, it’s about impossible to rein in. I would add that “money” printing will never resolve the issue of structural maladjustment. Monetary inflation will, however, ensure only greater quantities of “money” will be required come the inevitable bust. And those quantities will eventually bring to question confidence in “money.” Read monetary history.

Doug Noland’s weekly Credit Bubble Bulletin will be on my must read list this weekend—and in my opinion, should be on yours as well.  I found this on his website late on Friday evening.

Wikileaks: U.S. spied on Japanese government, corporations

The whistleblowing website Wikileaks released documents that show the United States has spied on 35 Japanese politicians, cabinet officials and corporations, including Prime Minister Shinzo Abe and car manufacturing giant Mitsubishi.

The documents, which appear to be five U.S. National Security Agency reports, four that are marked top secret, detail internal Japanese discussions on issues that include trade, climate change and nuclear policy. The documents also indicate the U.S. spied on Bank of Japan officials, Mitsubishi and Matsui.

The Wikileaks documents list 35 phone numbers targeted by the NSA, dating at least eight years back. Wikileaks said the U.S. passed the information to Australia, Canada, Great Britain and New Zealand, the so-called “Five Eyes” group.

Nothing is about to stop the American Empire from taking over the world.  Your business is their business.  This short UPI story, filed from Washington yesterday at 7:06 a.m. EDT, is worth reading—and it’s the second offering of the day from Roy Stephens.

Cables Show Hillary Clinton’s State Department Deeply Involved in Trans-Pacific Partnership

Democratic presidential candidate Hillary Clinton on Thursday attempted to distance herself from the controversial 12-nation trade deal known as the Trans-Pacific Partnership. During her tenure as U.S. secretary of state, Clinton publicly promoted the pact 45 separate times — but with her Democratic presidential rivals making opposition to the deal a centerpiece of their campaigns, Clinton now asserts she was never involved in the initiative.

“I did not work on TPP,” she said after a meeting with leaders of labor unions who oppose the pact. “I advocated for a multinational trade agreement that would ‘be the gold standard.’ But that was the responsibility of the United States Trade Representative.”

But at a congressional hearing in 2011, Clinton told lawmakers that “with respect to the TPP, although the State Department does not have the lead on this — it is the United States Trade Representative — we work closely with the USTR.” Additionally, State Department cables reviewed by International Business Times show that her agency — including her top aides — were deeply involved in the diplomatic deliberations over the trade deal. The cables from 2009 and 2010, which were among a trove of documents disclosed by the website WikiLeaks, also show that the Clinton-run State Department advised the U.S. Trade Representative’s office on how to negotiate the deal with foreign government officials.

If Hillary’s lips are moving, you know she’s lying!  This article was posted on the International Business Tribune website at 9:30 a.m. EDT yesterday morning—and it’s another contribution from Roy Stephens.

Puerto Rico nears default as debt restructuring beckons

Puerto Rico’s expected default on debt due Saturday would be the start to what could end up becoming one of the largest municipal restructurings, with the potential to open the door to a fight with investors and spark volatility in bond prices.

Puerto Rico Governor Alejandro Garcia Padilla shocked investors in June when he said the island’s debt—totaling $72 billion—was unpayable and required restructuring.

Puerto Rico has flagged that it will likely skip a $58 million payment due Aug. 1 on its Public Finance Corporation (PFC) debt, which has weaker investor protection than some other bonds.

This Reuters article, with a 1:20 minute CNBC video clip embedded, showed up on the CNBC website around 4:30 a.m. EDT on Friday morning—and I thank West Virginia reader Elliot Simon for sending it along.

Britain and France Point Fingers as Migrant Crisis Becomes a Political One

More than 4,500 vehicles are stuck along one of Britain’s main highways, caught in the chaos over efforts by desperate migrants to make their way through the Channel Tunnel from the French port city of Calais, 31 miles away. Another 4,500 cars and trucks are stuck on the other side of the English Channel.

Food is rotting, drivers are exasperated and commerce is delayed. Would-be vacationers bound for the Continent are furious, and the British news media is on a rampage, with The Daily Mail wondering how migrants could invade Britain when Hitler could not and calling for the army to be deployed.

The British government is in crisis mode, with Prime Minister David Cameron returning from Asia on Friday to lead yet another meeting of the security cabinet.

Under pressure to show that the government is in control, Mr. Cameron emerged on Friday to promise more high-tech security fencing and sniffer dogs for the French and the use of Defense Ministry land in Kent to park some of the waiting trucks, to get them off the highway.

This article, filed from London, appeared on The New York Times‘ website yesterday sometime—and I thank Patricia Caulfield for her first offering in today’s column.

France’s Hollande Denies Finalizing Mistral Deal Termination With Russia

French President Francois Hollande on Friday dismissed reports that Moscow and Paris had reached an agreement on the settlement of the Mistral warships deal, the RTL radio said.

“We have not reached an agreement yet,” the RTL cited Hollande as saying.

Russian president’s aide on military-technical cooperation, Vladimir Kozhin, said Thursday that Russia and France had agreed the terms of the settlement of the contract on delivery of two Mistral-class helicopter carriers to Russia, which had been suspended by Paris.

This brief news item, filed from Paris, appeared on the sputniknews.com Internet site at 7:50 p.m. Moscow time on their Friday evening, which was 12:50 p.m. EDT in Washington.  It’s courtesy of Roy Stephens.

German government accuses news website of treason over leaks

Germany has opened a treason investigation into a news website a broadcaster said had reported on plans to increase state surveillance of online communications.

German media said it was the first time in more than 50 years journalists had faced treason charges, and some denounced the move as an attack on the freedom of the press.

“The federal prosecutor has started an investigation on suspicion of treason into the articles … published on the internet blog Netzpolitik.org,” a spokeswoman for the prosecutor’s office said.

She added the move followed a criminal complaint by Germany’s domestic intelligence agency, the Office for the Protection of the Constitution (BfV), over articles about the BfV that appeared on the website on 25 February and 15 April. It said the articles had been based on leaked documents.

This story appeared on The Guardian website at 2:32 a.m. BST yesterday morning—9:32 p.m. New York time on Thursday evening—and my thanks go out to Patricia Caulfield for sending it our way.

The Last Thing the Eurozone Needs Is an Ever Closer Union

Fuite en avant is a wonderful French expression that is hard to translate into English. Literally, it means “forward flight.” Better approximations include “headlong rush,” “panicky compulsion to exacerbate a crisis,” or even “unconsciously throwing oneself into a dreaded danger.” Faced with Berlin’s power grab to reshape the eurozone along German lines, Paris’s response has been quintessential fuite en avant: proposing even closer ties with Germany in order to try to mitigate the damage done by existing ones. But if a marriage is miserable and divorce is not yet in the cards, might it not be better to have separate bedrooms?

To be fair to France’s president, François Hollande, a headlong rush toward greater intimacy has been the default response to previous crises thrown up by European integration, so it is the most common prescription now. If a fiscal and political union is truly necessary for the eurozone to survive, as many argue, his proposal of a democratically elected eurozone government that would act as a fiscal counterpart to the European Central Bank (ECB) and — whisper it softly — curb German power may make sense. Italy’s finance minister has suggested something similar.

But creating a eurozone government to bridge the economic and political divisions exacerbated by the crisis would be putting the cart before the horse. Or to put it differently, it would be seeking an institutional fix to a much deeper political conflict. Yes, well-functioning common institutions would make Europe’s dysfunctional monetary union work better: Federalism works fine in the United States and elsewhere. But that is because there is broad political acceptance of those federal institutions’ legitimacy — which, in turn, is because the United States is a nation-state with enough of a sense of shared political community to accept majoritarian democratic rule. Unlike the eurozone. Germany and France sharing a government? Hard to imagine. Germany and Greece? Impossible.

This commentary appeared on the foreignpolicy.com Internet site yesterday—and it’s certainly worth reading.  It’s the second contribution in a row from Roy Stephens.

Why Greece’s Lenders Need to Suffer

There is definitive proof, for anyone willing to look, that Greece is not solely or even primarily responsible for its own financial crisis. The proof is not especially exciting: It is a single bond, with the identification code GR0133004177. But a consideration of this bond should end, permanently, any discussion of Greece’s crisis as a moral failing on the part of the Greeks.

GR0133004177 is the technical name for a bond the Greek government sold on Nov. 10, 2009, in a public auction. Every business day, governments and companies hold auctions like this; it is how they borrow money. Bond auctions, though, are not at all like the auctions we’re used to seeing in movies, with the fast talkers and the loud hammers. They happen silently, electronically. Investors all over the world type a number on their keyboards and submit it as their bid: the amount of interest they would insist on receiving in exchange for the loan. Just as with mortgages and credit cards, the riskier a loan is, the higher the rate would need to be, compensating the lender for the chance that the borrower in question will fail to pay it back.

On that day in 2009 when GR0133004177 was issued, investors had every reason to assume that this was an especially risky loan. The Greek government wanted 7 billion euros, or $10.5 billion, which would not be paid back in full until 2026. These were all sophisticated investors, who were expected to think very carefully about the number they typed, because that number had to reflect their belief in the Greek government’s ability to continually pay its debts for the next 17 years. I was shocked, looking back, to see the winning number: 5.3 percent. That is a very low interest rate, only a couple of percentage points above the rate at which Germany, Europe’s most creditworthy nation, was borrowing money. This was a rate that expressed a near certainty that Greece would never miss a payment.

This very interesting article showed up on The New York Times website back on Tuesday—and I thank Patricia Caulfield for sharing it with us.

Greek stock market to reopen, with restrictions

The Athens stock exchange will reopen Monday, more than a month after Greece’s financial crisis forced the authorities to suspend all trading.

But there will be some restrictions for local investors, the Greek finance ministry said, to prevent more money flooding out of the banking system.

They will only be allowed to buy shares with existing holdings of cash, and won’t be able to draw on their Greek bank accounts.

Capital controls were introduced on June 29, including the closure of banks and financial markets. ATM withdrawals were limited to €60 ($66) per day.

This story, filed from London, was posted on the money.cnn.com Internet site at 4:12 p.m. EDT yesterday—and it’s another contribution from Patricia Caulfield.

The Ukraine Imbroglio: John Batchelor Interviews Stephen F. Cohen

One of the qualities of these Stephen F. Cohen interviews is that more details of the Great Game between Washington and Russia are revealed than one finds in the usual published articles out there. In this episode Batchelor and Cohen discuss how well Washington’s foreign policy has succeeded in isolating Russia, and possibly just as important are the beginning changes Putin is making in Russia’s internal economy and infrastructure.  Putin is beginning to react to the military presence of NATO in the Baltic States; Putin publicly supports FIFA’s role in the coming World Cup; Russia talks to Turkey, Iran and the United States about cooperating in an air campaign against the Islamic State, and none of this shows isolation of Russia. Indeed, Cohen presents details that show that the very opposite has occurred and that Putin is the leading global statesperson.

And there are also faint signs that Washington is thawing in its hostility to Russia on the diplomatic front. However, the military build up goes on with both sides. Putin is demonstrating willingness for diplomacy and wilfulness in showing Russia’s importance in solving geopolitical issues. Is Washington beginning to notice?

Is Europe more or less isolated from Russia as well? Ukraine comes back into the discussion as Europe becomes more estranged in its relationship with Ukraine; Cohen expounds on the rift between Europe and Russia – increasingly reluctant on the part of Europe – and the concept of Atlanticism as critical to understanding why Europe has gone along with Washington. The rifts are there and the most recent visit by 12 members of French Parliament to Crimea underline the process, and possibly reveal a trend. France seems to be taking the lead in working for Minsk2. These are momentous events that are going to redefine the global community without the leadership of the United States. The French do not want Crimea to become another Cuba. The United States does.

And finally there is more trouble in Kiev and for Ukraine. The country is all but collapsed, and yet Washington is still supplying new weapons (specialized radar units) and training for the Ukrainian Army. Significantly, that army does not exist as a fighting force anymore; the Right Sector “militias” are doing most of the fighting and are only very loosely controlled by Kiev. The “Normandy Four” are concerned that war will escalate in the Mariupol area and the rebels will take more territory in the south. In the last broadcast Cohen mentioned the possibility that Ukraine would more or less cease to exist and Washington would, with ever increasing support, turn the country into a kind of “colony” As Cohen states, Europe is uninterested in Ukraine as a trading partner now (and that was a root cause of this conflict, he reminds). But at the same time Europe does not want this war and yet it is clear that Washington does; it is incomprehensible that Washington does not see a problem for Atlanticism and NATO with its present actions. And yet apparently it is blind.

This 39:48 minute audio interview with Stephen was conducted on Tuesday—and posted on the johnbatchelorshow.com Internet site.  I thank both Ken Hurt and Larry Galearis for contributing to this story.

Russia Shoots Down U.S. Stealth Coup in Armenia

Times are tough for America’s “color revolution” industry. Perfected in Eastern Europe after the fall of the Soviet Union, and honed during the so-called “Arab Spring,” the process of backing subversion in a targeted country and overthrowing a sitting government under the cover of staged mass protests appears to be finally at the end of running its course.

That is because the United States can no longer hide the fact that it is behind these protests and often, even hide their role in the armed elements that are brought in covertly to give targeted governments their final push out the door. Nations have learned to identify, expose, and resist this tactic, and like Adolf Hitler and the Nazi regime’s tactic of Blitzkrieg or “lighting war,” once appropriate countermeasures are found, the effectiveness of lighting fast, overwhelming force be it military or political, is rendered impotent.

This was most recently observed in Armenia during the so-called “Electric Yerevan” protests – Yerevan being the capital of Armenia, and “electric” in reference to the alleged motivation of protesters – rising electric prices.

American-backed “color revolutions” always start out with a seemingly legitimate motivation, but soon quickly become political in nature, sidestepping many of the legitimate, practical demands first made, and focusing almost entirely on “regime change.” For the Armenian agitators leading the “Electric Yerevan,” they didn’t even make it that far and spent most of their initial momentum attempting to convince the world they were not just another US-backed mob.

This right-on-the-money commentary appeared on the journal-neo.org Internet site yesterday—and it’s a must read for any serious student of the New Great Game.  I thank Roy Stephens for digging it up for us.

Turkey Goes to War

One month ago, Abu Mohammed al-Halabi painted a dismal picture of his fighters’ struggles against the Islamic State along a crucial geographical corridor north of the Syrian city of Aleppo. The jihadis had killed three of his men in a nighttime ambush in mid-June while using night-vision goggles more advanced than anything his group possessed. His brigade had been fighting for 10 days straight without any injection of money or equipment. If this continued for another week, the beleaguered rebel commander told Foreign Policy, “anything could happen” — even a complete collapse of rebel lines.

“There has been one airstrike [by the anti-Islamic State coalition], and it’s so shameful” that there hasn’t been any more support, he said in June. “Our friends give us shameful amounts of aid.”

But now, Abu Mohammed, a leader of Thuwar al-Sham — an alliance of rebel brigades active in Aleppo city and the surrounding countryside that claims to include roughly 3,500 fighters in its ranks — is singing a different tune. An agreement last week between Ankara and Washington to fight the Islamic State has left him optimistic that new military equipment and even game-changing airstrikes could soon be on their way.

This article, filed from Gaziantep in Turkey, appeared on the Foreign Policy website yesterday—and it’s another contribution from Roy Stephens.

The Politics of Betrayal: Obama Backstabs Kurds to Appease Turkey

The Kurdish militias (YPG, PKK) have been Washington’s most effective weapon in the fight against ISIS in Iraq and Syria. But the Obama administration has sold out the Kurds in order to strengthen ties with Turkey and gain access to Turkey’s Incirlik Air Base. The agreement to switch sides was made in phone call between President Obama and Turkish President Recep Tayyip Erdogan less than 48 hours after a terrorist incident in the Turkish town of Suruc killed 32 people and wounded more than 100 others.

The bombing provided Obama with the cover he needed to throw the Kurds under the bus, cave in to Turkey’s demands, and look the other way while Turkish bombers and tanks pounded Kurdish positions in Syria and Iraq. The media has characterized this shocking reversal of US policy as a “game-changer” that will improve US prospects for victory over ISIS. But what the about-face really shows is Washington’s inability to conduct a principled foreign policy as well as Obama’s eagerness to betray a trusted friend and ally if he sees some advantage in doing so

Turkish President Erdogan has launched a war against the Kurds; that is what’s really happening in Syria at present. The media’s view of events–that Turkey has joined the fight against ISIS–is mostly spin and propaganda. The fact that the Kurds had been gaining ground against ISIS in areas along the Turkish border, worried political leaders in Ankara that an independent Kurdish state could be emerging. Determined to stop that possibility,  they decided to use the bombing in Suruc as an excuse to round up more than 1,000 of Erdogans political enemies (only a small percentage of who are connected to ISIS) while bombing the holy hell out of Kurdish positions in Syria and Iraq. All the while, the media has been portraying this ruthless assault on a de facto US ally, as a war on ISIS. It is not a war on ISIS. It is the manipulation of a terrorist attack to advance the belligerent geopolitical agenda of Turkish and US elites. Just take a look at these two tweets from CNN Turkey on Saturday and you’ll see what’s going on under the radar:

This longish commentary by Mike Whitney appeared on the counterpunch.org Internet site on Tuesday—and for both length and content reasons, had to wait for today’s column.  I consider it a must read.  Mike Whitney had another article on this issue.  It was posted on the counterpunch.org Internet site yesterday sometime—and it’s headlined “Power-Mad Erdogan Launches War in Attempt to Become Turkey’s Supreme Leader“—and it’s courtesy of Patricia Caulfield.

The Guardian view on Turkey and the Kurds: putting peace at risk — Editorial

Ankara’s decision to throw away years of negotiations with the Kurdish nationalist movement in Turkey is both irresponsible and perverse. It seems likely to add to the dangers and uncertainties that the collapse of state authority in Syria and Iraq have brought to the wider region and it could have ominous implications for Turkey’s internal politics. Since the emergence of the modern state after the first world war, the relations between the ethnic Turkish majority and the Kurds, the country’s largest minority, have been the single largest problem faced by the country. Ankara originally tried to solve it by suppression and compulsory assimilation, hoping that in time Kurds would become indistinguishable from the rest of the population. The predictable result was resistance, in the early years in the form of sporadic revolts and, in the late 1970s, in the form of the Kurdistan Workers’ party, or PKK, an armed separatist movement.

A debilitating war, inside Turkey and across the border in northern Iraq, followed, until both sides, informally and then formally, began to look for a settlement, a process aided by the capture of the PKK leader Abdullah Öcalan. The Turks liberalised their cultural policies, while the PKK foreswore separatist aims in favour of autonomy. In 2013, Mr Öcalan released a letter calling for a ceasefire and an end to armed struggle.

This editorial appeared on The Guardian‘s website at 6:59 p.m. BST yesterday evening, which was 1:39 p.m. in Washington.  It’s courtesy of Patricia Caulfield as well.

OPEC frets over oil price volatility

The Organization of Petroleum Exporting Countries said in a joint statement with Russia price volatility and oversupply was damaging the market for crude oil.

Russian Energy Minister Alexander Novak hosted OPEC Secretary-General Abdullah al-Badri to discuss short-term market tends and long-term prospects in the crude oil market.

“It was stressed during the meeting that price volatility and the general oversupply in the oil market observed in recent quarters have been less conducive for market stability,” both parties said in a joint statement. “Despite current uncertainties, signs of a more balanced market in 2016 may provide much desired stability to the oil market in the longer-term, a prerequisite for the continuity of timely and adequate investments.”

OPEC in its last string of regular meetings opted to keep production levels static despite price swings in order to protect their market share. OPEC’s secretary-general in April described the market situation as “intermittent.”

This UPI news item, filed from Moscow, put in an appearance on their Internet site at 7:11 a.m. EDT on Friday morning—and I thank Roy Stephens for sending it.

China Market Manipulation Probe Targets Spoofers After Crash

Spoofing has become the latest target in China’s campaign against stock-market manipulation after a $3.5 trillion sell-off.

The practice, which involves placing then canceling orders to move prices, is suspected in 24 accounts on the Shanghai and Shenzhen stock exchanges, the China Securities Regulatory Commission said on its microblog. The bourses have restricted the accounts and regulators are investigating program traders, who have recently had an “obvious” impact on the stock market, the CSRC said.

China’s focus on spoofing follows a probe of “malicious” short selling, part of the government’s unprecedented effort to shore up investor confidence after a 29 percent tumble in the Shanghai Composite Index from its June high. Spoofing entered the popular lexicon this year after U.S. prosecutors said a London trader’s use of the strategy contributed to the flash crash in May 2010, when American equities briefly lost almost $1 trillion of value. The Shanghai Composite sank 8.5 percent on Monday, its biggest rout since 2007.

“The public isn’t happy about the market plunge so the regulator needs to take some actions as a response, and that’s part of the government’s plan to prop up the market,” said Zhang Haidong, the chief strategist at Jinkuang Investment Management in Shanghai. “Whether it’ll be effective remains to be seen.”

This Bloomberg story appeared on their Internet site on Thursday evening Denver time—and my thanks go out to Elliot Simon for digging it up for us.

Emergency measures fail to halt China’s stock market nosedive

Chinese share prices suffered a dismal end to a dire month as promises of more emergency measures from officials in Beijing failed to stem a stock market slide that is now reverberating around the global economy.

Despite policymakers’ pledges to underpin the flagging Chinese economy and a further crackdown by the markets watchdog, stocks fell further on Friday and posted their biggest monthly loss in almost six years.

The Shanghai composite index lost 10% this week alone and was down more than 14% for the whole of July. That extends the sharp sell-off that began in China’s stock market in mid-June, a rout that has prompted the country’s securities regulator to warn of “panic sentiment” gripping investors, many of whom are individuals that have borrowed heavily to play the stock market.

The backdrop to the heavy selling on Chinese stock markets, which are still up about 13% from the start of the year, is an economy that appears to be losing steam.

This story appeared on theguardian.com Internet site at 6:45 p.m. BST on their Friday evening—and it’s another offering from Patricia Caulfield, for which I thank her.

China’s Naked Emperors — Paul Krugman

But it also looks as if the Chinese government, having encouraged citizens to buy stocks, now feels that it must defend stock prices to preserve its reputation. And what it’s ending up doing, of course, is shredding that reputation at record speed.

Indeed, every time you think the authorities have done everything possible to destroy their credibility, they top themselves. Lately state-run media have been assigning blame for the stock plunge to, you guessed it, a foreign conspiracy against China, which is even less plausible than you may think: China has long maintained controls that effectively shut foreigners out of its stock market, and it’s hard to sell off assets you were never allowed to own in the first place.

So what have we just learned? China’s incredible growth wasn’t a mirage, and its economy remains a productive powerhouse. The problems of transition to lower growth are obviously major, but we’ve known that for a while. The big news here isn’t about the Chinese economy; it’s about China’s leaders. Forget everything you’ve heard about their brilliance and foresightedness. Judging by their current flailing, they have no clue what they’re doing.

I’m no fan of Krugman, but he pretty much nails it with this opinion piece that appeared on The New York Times website yesterday—and I thank Patricia Caulfield for her final offering in today’s column.  It’s worth reading.

2015 American Liberty High Relief Gold Coin “Sells Out” Within Hours – Updated

The 2015 American Liberty High Relief 24-karat gold coin went on sale today at noon Eastern Standard Time. Within hours it was “sold out”.

By the end of the business day (about 5:00 p.m. EST), the coin was listed as “Currently Unavailable” on www.usmint.gov, the website of the United States Mint. This means that while present inventory has been depleted, the Mint may resume sales at a later date when new product stock is available.  The mintage limit for this coin was set at 50,000 pieces. Collectors can sign up for an email reminder that lets them know when this will happen, if it happens at all.

The U.S. Mint usually sends a notice to news media if no new stock will be forthcoming. CoinWeek will publish the details of such an announcement if it is made.

The 24-karat gold American Liberty high relief coin consists of one troy ounce of 99.99% pure gold and has a face value of $100. It has a reeded edge and a ‘W’ mint mark for West Point. When it went on sale, the coin was priced at $1,490 according to the spot price of gold and the Mint’s retail markup table.

This gold-related story appeared on the coinweek.com Internet site on Thursday—and I thank Elliot Simon for bringing it to our attention.

Mining companies, regulators deathly silent after midnight raid on gold prices

With gold and silver on the defensive following a dramatic midnight raid on gold prices last week, Mike Gleason reached out to Chris Powell, Secretary Treasurer at the Gold Anti-Trust Action Committee, also known as GATA to discuss possible gold price manipulation.

Mike Gleason: Several days ago, we had another attack on the gold market – right as it was holding above a critical price support zone. Someone sold several billions of dollars in gold futures contracts during the wee hours of the night immediately before the Chinese trading day began. It happened during a time of low liquidity like it normally does, and it took the price down over $40 in the matter of a few seconds, halting trading twice for a brief period. What are we to make of all this Chris?

Chris Powell: Well it’s pretty depressing for monetary metals investors. On the other hand, I suppose you could see it in a way as progress for the cause because it was the most brazen, obvious, clumsy attack yet, and it has prompted a few people to acknowledge that it was a manipulation.

The problem is the people who are acknowledging that cannot quite bring themselves to question whether the central banks were involved in it. But it was so obvious that even people who are not aligned with the manipulation school are acknowledging that somebody was very heavily trying to drive the price down.

This interview with Chris, in transcript form, appeared on the mining.com Internet site yesterday—and I found it on the gata.org website.  It’s certainly worth reading.

No need for ‘theories’ with gold — just address the facts and documentation

Here’s another financial analyst who can’t be bothered with actual analysis, at least when it comes to gold: Peter Hodson of 5i Research Inc. of Waterloo, Ontario, former chairman of Sprott Asset Management.

In commentary published today in Toronto’s National Post, “5 More Reasons Why Investors Shouldn’t Worship Gold Right Now” — Hodson offers a paragraph titled “Conspiracy Theories Won’t Help Gold.” It reads:

“Every time gold goes down, the gold bugs blame the price drop on a take down by some secret cartel working with the banks. The theory here is that governments do not want investors losing faith in fiat currencies, so they control the gold price to make paper currency look better.”

This guy easily falls into John Embry’s comment that the miners and their ilk are “either ignorant, naive, or complicit“.  Too bad John didn’t include ‘stupid‘ in that category as well.  This commentary by Chris Powell, along with the link to the that National Post article, is contained in this GATA release that appeared on their website yesterday.

REPEAT: ‘I’m Bullish’ on Gold, Fed In a Hurry to Raise Rates – Jim Grant

Don’t tell Jim Grant, the publisher of Grant’s Interest Rate Observer, that gold is a hedge.

The author and publisher said the metal is much more dynamic; providing a trifecta of price, value and sentiment, and investors should have exposure to it. “Gold is an investment in monetary and financial disorder – not a hedge. You look around the world and you see exchange rates are properly disorderly, when you look around the world of lending and borrowing — we are in a regime of price control by another name, so-called zero percent rates and quantitative easing by the world central banks – we are in one of the most radical periods of monetary experimentation in the annals of money,” Grant told Kitco News on Thursday.

This 6:14 minute video clip, plus transcript, showed up on the kitco.com Internet site on Thursday—and I found it all by myself!

Swiss Gold Refineries and the sale of Valcambi

The normally low-key Swiss gold refining market has been thrown into the spotlight with the announcement that private company Valcambi, the world’s largest gold refinery, is being acquired by Indian group Rajesh Exports Ltd (REL), the world’s largest gold jewellery manufacturer.

This acquisition is worth analysing for a number of reasons, namely will the Valcambi-Rajesh transaction impact marginal gold supply out of Switzerland and elsewhere, and how will the transaction, if at all, increase the likelihood of other large gold refineries becoming future acquisition targets?

The announcement of the Valcambi acquisition should not come as a surprise because it was telegraphed in early July by the Economic Times of India. In its article, the Economic Times revealed that Rajesh Exports was in discussions to acquire a large stake in a Swiss gold refinery, and although the identity of the acquiree was not confirmed at that time, the Times said that Rajesh had “sounded out Valcambi…on a possible transaction”.

Since both Rajesh and majority Valcambi shareholder Newmont Mining declined to comment at the time (with Rajesh citing stock exchange rules), the Times and its industry sources were left to speculate that two of the other three large Swiss refineries, Argor-Heraeus or Metalor, might instead be targets, as opposed to Valcambi. Notably, the 4th large Swiss gold refinery, PAMP, was not mentioned in the Economic Times report.

This very long, but very interesting commentary by Ronan Manly put in an appearance on the Singapore-based website bullionstar.com yesterday.  I first saw this essay on the Sharps Pixley website.

Perth Mint and U.

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